A five-year project has a projected net cash flow of Rs. 195,000, Rs. 225,000,

Rs. 380,000, Rs. 240,000, and Rs. 185,000 in the next five years respectively.

It will cost Rs. 800,000 to implement the project.

If the desired rate of return (discount rate) is 15 percent:

(i). Conduct a discounted cash flow calculation to determine the NPV. Should the project be considered for approval, Why?

(ii). Calculate and compare the discounted and undiscounted pay-back periods.

(iii) Work out the Profitability Index. What are the criteria to consider/reject a project using the Profitability Index? Should we consider the project in this case? Why