A tech company is considering an investment in a new software development project. The details are as follows:

Initial Investment: $2,000,000

Yearly Cash Inflows:

•Year 1: $600,000

•Year 2: $700,000

•Year 3: $800,000

•Year 4: $900,000

•Year 5: $1,000,000

Discount Rate: 12%

Requirements:

1.Calculate the payback period.

2.Compute the net present value (NPV).

3.Determine the internal rate of return (IRR).

4.Evaluate the project’s profitability index (PI).

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