ABC Corporation is considering purchasing a new production line. The following details are provided:

• Cost of Production Line: $500,000
• Expected Useful Life: 10 years
• Salvage Value: $50,000
• Depreciation Method: Straight-line
• Cost of Capital: 8%

Estimated Cash Flows and Profits:

Year	Cash Flow	Profit
1	$60,000	$5,000
2	$70,000	$10,000
3	$80,000	$15,000
4	$90,000	$20,000
5	$100,000	$25,000
6	$110,000	$30,000
7	$120,000	$35,000
8	$130,000	$40,000
9	$140,000	$45,000
10	$150,000	$50,000

a) Identify the relevant costs in investment appraisal decision-making. b) Explain the difference between the payback period and internal rate of return (IRR). c) Using the data above, calculate: i) The payback period in years. ii) The net present value (NPV) and advise if ABC Corporation should invest in the new production line.