DEF Company is evaluating an investment in a new product line. The cost of the new equipment is $800,000. The project is expected to yield annual cash inflows of $180,000 for 6 years. The equipment will be depreciated using the straight-line method over its useful life with no salvage value.

Requirements:

• Calculate the payback period.
• Calculate the NPV using a discount rate of 12%.
• Calculate the IRR.
• Determine the profitability index.
• Analyze if DEF Company should accept the project based on the above criteria.