Benjamin is considering a project which will generate cash flows of $150,000 per year for the next 8 years and have an initial cash outlay of $500,000. What is the projects payback period? Show all working steps.

year	Outflow $	Inflow $	Payback
0	500		-500
1		150	-350
2		150	-200
3		150	-50
4		150	100

PHJ Ltd company is considering purchasing a new tunnelling equipment costing $125 000 that will enable it to reduce its existing labour costs by $20 000 a year for 12 years.

The company estimates that it will have to spend $3000 every two years overhauling the equipment.

The required rate of return is 10% per annum. Assume all cash flows are made at the end of the year, would advise PHJ Ltd to purchase the equipment?

Show all the working steps of your answer.