Carter Enterprises is considering an investment project with the following details:

• Initial investment of R700,000 and a residual value of R60,000.

Year	Cashflows	Discount factor
Year 1	R120,000	0.909
Year 2	R140,000	0.826
Year 3	R150,000	0.751
Year 4	R100,000	0.683
Year 5	R110,000	0.621

Cost of capital is 8%. Depreciation is R50,000 per year. Tax rate is 28%.

Required:

1. Calculate each of the following:
   • 1.3.1 Profitability Index (5)
   • 1.3.2 Discounted Payback period (5)