An investment will require $X today and $5m in one year. It will provide income

of $6m per year for 5 years starting in four years.

a) Find the following if f X=$10m and i=12%

i) The Net Present Value.

ii) The Profitability Index.

iii) The Payback period.

b) Without doing any additional calculation indicate if the investment is

profitable at 12% if X=$10m. Give reasons.

c) Management requires a minimum IRR of 12% in order to proceed. Find the

maximum value of X that will meet this goal.

Actuarial Science need steps, thanks!