An energy company is considering developing an LNG fuelled power station. The project will require an initial investment of $130 million. Operation and Maintenance (O&M) costs are expected to be $5 million per year and revenues are expected to be $34 million per year. The energy companys MARR is 12% per annum, compounding quarterly.

(a) What is Simple Payback Period for this project? (1 mark)

(b) What is the Discounted Payback Period for this project? (1 mark)