GHI Ltd is planning to purchase a new production machine. The following details are available:

• Cost of machine: AUD 500,000
• Expected life: 5 years
• Residual value: AUD 50,000
• Depreciation method: Sum of the years digits
• Cost of Capital: 10%

Expected Cash Flows:

Year	Cash Flow
1	100,000
2	120,000
3	140,000
4	160,000
5	180,000

Requirements:

1. Calculate the payback period.
2. Compute the NPV.
3. Determine the profitability index (PI).
4. Calculate the IRR.
5. Based on the analyses, should GHI Ltd invest in the machine?