Company ABC is looking to invest. The cost to acquire land will be $300,000 and $40,000 worth of debris will be cleared and sold to construct. Construction is $300,000 to build, needing $200,000 of inventory to start operations. ABC will make $500,000 per year in sales, $200,000 COGS, with another $50,000 in gen operating costs. ABC will remodel all of its stores at the end of year 5 and the expected cost of this is $30,000. The expected life of the store is 10 years, and real estate is worth $600,000. ABC plans on selling and working capital will be sold off in 10 years. ABC requires a 10% rate of return on inv.

What is payback period?

What is NPV? Should ABC make this decision?

If IRR is 15%, should ABC make this decision?