Eco Solutions Inc. plans to invest in a new recycling plant. The initial investment required is $4 million. The plant is expected to generate the following annual cash inflows:

• Years 1-5: $500,000 per year
• Years 6-10: $700,000 per year

The company’s required rate of return is 9%.

Requirements:

1. Calculate the NPV of the recycling plant.
2. Determine the IRR.
3. Compute the payback period.
4. Assess the profitability index (PI).
5. Should Eco Solutions Inc. invest in the new recycling plant?