Gordon Industries is reviewing an investment project with the following details:

• Initial investment of R1,200,000 and an expected residual value of R100,000.

Year	Cashflows	Discount factor
Year 1	R160,000	0.909
Year 2	R180,000	0.826
Year 3	R190,000	0.751
Year 4	R140,000	0.683
Year 5	R150,000	0.621

Cost of capital is 10%. Depreciation is R90,000 per year. Tax rate is 30%.

Required:

1. Calculate each of the following:
   • 1.7.1 Profitability Index (5)
   • 1.7.2 Discounted Payback period (5)