Company A is evaluating a capital investment project with the following details:

• Initial Investment: $10,000,000
• Expected Life: 5 years
• Annual Revenue: $4,000,000
• Annual Costs (excluding depreciation): $1,000,000
• Depreciation: Straight Line
• Salvage Value: $1,000,000
• Cost of Capital: 15%
• Tax Rate: 30%

Requirements:

1. Calculate the Annual Depreciation Expense.
2. Determine the Annual Net Income after tax.
3. Compute the Annual Net Cash Flows.
4. Calculate the NPV of the project.
5. Determine the Payback Period.