Delta Engineering is planning to invest in a new production facility that costs EUR 400,000. The following are the projected cash flows:

• Year 1: EUR 100,000
• Year 2: EUR 120,000
• Year 3: EUR 150,000
• Year 4: EUR 180,000

Requirements:

1. Calculate the payback period.
2. Compute the NPV at a discount rate of 11%.
3. Determine the IRR.
4. Calculate the ARR.
5. Should Delta Engineering proceed with the investment? Provide a rationale based on your calculations.