CALCULATE PAYBACK PERIOD & INTERNAL RATE OF RETURN (IRR) OF THE FOLLOWING CASHFLOWS : (show workings and explain answers)

DISCOUNTED CASH FLOWS: DISCOUNT RATE IS 10.5%

CALCULATING NPV:

Initial investment = 500,000

Discounted cash flows:

Y1 -30000 X 0.9049 = -27147

Y2 82500 X 0.8189 = 67559.25

Y3 211537.5 X 0.7411= 156,770.44

Y4 302926.5 X 0.6707 = 203,172.80

Y5 506741 X 0.6070 = 307,591.79

INITIAL INVESTMENT 500,000

NPV= = 500,000 + 707,947.28 = 207,947.28