ABC Corporation is considering investing in a new project that requires an initial investment of

500,000. The project is expected to generate cash flows of 150,000 per year for the next 6

years. The company's cost of capital is 10%. The company uses the net present value (NPV)

method to evaluate investment decisions. Should ABC Corporation invest in the new project?

Questions:

1. What is the net present value of the new project?

2. Should ABC Corporation invest in the new project based on the net present value?

3. What is the internal rate of return (IRR) of the new project?

4. Should ABC Corporation invest in the new project based on the internal rate of return?

5. What is the payback period of the new project?

6. Should ABC Corporation invest in the new project based on the payback period?