Clean Energy Inc. plans to build a new solar power plant. The initial construction cost is $5 million. The plant is expected to operate for 20 years with the following projected annual net cash inflows:

• Years 1-10: $700,000 per year
• Years 11-20: $900,000 per year

The company’s discount rate is 7%.

Requirements:

1. Calculate the NPV of the project.
2. Determine the IRR of the project.
3. Calculate the payback period.
4. Assess the profitability index (PI) of the project.

Should Clean Energy Inc. proceed with the project?