Assume that you recently went to work for ABC Company as a financial analyst intern. Your boss, the chief financial officer, just handed you the estimated cash flows for one proposed project. The cash flows are as follows:

Year

Cash Flows $($in thousands$)$

$0$

$($$$100)$

$1$

$15$

$2$

$5$

$3$

$50$

$4$

$45$

$5$

$60$

To evaluate this project with different decision rules, you have also gathered the following information from your boss: The standard acceptable payback period is four years, and the discount rate is $10\mathrm{.}5\%.$

$1)$ What is the payback period of this project? Should this project be accepted based on the payback decision rule?

$2)$ What is the discounted payback period for this project? Would this project still be accepted based on the same accepted standard of payback period?

$3)$ What is the NPV of this project? Should this project be accepted based on the NPV decision rule?

$4)$ What is the IRR of this project? Should this project be accepted based on the IRR decision rule?

$5)$ Assuming that the discount rate is $9\mathrm{.}5\%,$ what would be the NPV of this project based on this new discount rate?