ABC Corporation is considering investing in a new product line:

• Investment: $750,000
• Expected annual cash inflows:
  • Year 1: $200,000
  • Year 2: $220,000
  • Year 3: $240,000
  • Year 4: $260,000
  • Year 5: $280,000
• Depreciation: Double declining balance
• Cost of capital: 7%
• Scrap value: $50,000 at the end of Year 5

Required:

1. Calculate the NPV of the new product line.
2. Determine the IRR.
3. Compute the payback period.
4. Calculate the profitability index.
5. Evaluate whether the new product line should be pursued.