ABC Corporation is thinking of buying some new equipment for its marketing activities. The equipment will cost $200,000 and last for 4 years. At the end of 4 years then can sell the equipment for $50,000. The equipment will generate an extra $50,000 in revenue in the first year and then increase by 10% for the next three years. For projects like this the company expects a return of 12%.

Based on above calculate the project's. (15 Marks)

1. NPV
2. IRR
3. Profitability Index
4. Payback
5. Discounted Payback

2. Should ABC Corp move ahead with this project? Management's benchmarks for both paybacks is < 3 years. (3 marks)