Company PQR is considering an investment in a new product line with the following data:

• Initial investment: $500,000
• Expected annual cash inflows: $100,000 for 8 years

Requirements:

1. Calculate the payback period.
2. Compute the NPV at a discount rate of 7%.
3. Determine the IRR.
4. Analyze the sensitivity of the NPV to changes in the discount rate by calculating the NPV at 6% and 8%.