After a bad accident, Anton receives a large sum in compensation. He is thinking about using it in a stretch limousine to hire out for special occasions. The cost of the limousine is 100,000. Anton is due to retire in six years, at which stage he thinks he will be able to sell the limousine for 40,000. The net cash inflows for the venture, after allowing for the drivers wages and other direct expenses are:

End of year Net cash flow ()

1 10,000

2 15,000

3 20000

4 20000

5 15000

6 15000

(a) Find the payback period for this venture.

(b) Calculate the net present value using a discount rate of 8%,