A Solar panel production firm Powersol plc, is considering an investment in new solar production technology. The new investment would require initial funding of 4 million today and further expenditure on manufacture of 1m in each of the years 6 and 7. The net cash inflow for the years 1 to 4 is 2.34 million per year. Some equipment could be sold in the end of year 5 when the production ends, and together with the cash flows from operation this would produce a net cash flow of 4.85 million. The required rate of return of Soleil SA is 12% and Soleil has been known to use a payback period of 2 years in the past. However, the firms managers believe that this payback period may be too short.

Evaluate the production line mentioned above using the following investment appraisal methods:

1. Payback Period (PP)
2. Net Present Value (NPV)
3. Discounted Payback Period
4. Profitibility Index (PI)