I have a friend who offered me an opportunity to invest in the Fyre Festival version 2.0[1]. He said that it will be highly successful and became the new Coachella or Ultra. It first version will be in 2021 and they are planning to do it in an island in Miami, they said that they are in discussions with Brickell Key Island and Grove Isle.

He said that I should invest $1MM now and I will receive a share of the profits in each of the 4 next Festivals. He mentioned that the estimation of my share of the profits that they calculated is the following one:

2020: $300,000

2021: $450,000

2022: $600,000

2023: $700,000

Use a discount rate of 12% and as benchmark for recover the initial investment is 3 years, calculate and answer:

1. Calculate IRR, should I invest according to this tool?
2. NPV, should I invest according to this tool?
3. Payback period, should I invest according to this tool?

[1] If you do not know what it was Fyre, I suggest watching the documentary about it: FYRE: The Greatest Party That Never Happened in Netflix or Fyre Fraud in Hulu.