Assume you are a Junior Financial Analyst at a firm which is considering an investment project which has the cash flows as shown in the table below. The firms cost of capital is 12% and requires that all its investments recover capital within 5 years.

Net cash outflow schedule

Year Cash flow

0 $ (650,000.00)

1 175,000

2 190,000

3 220,000

4 150,000

5 115,000

Required:

a)Using the information provided, calculate:

(i)The payback period

(ii)The discounted payback period

(iii) The net present value

(iv)The profitability index

b)Determine whether the project should be implemented.