Indiana Inc. is appraising an investment project which has an expected life of five years, and which will not be repeated. The initial investment to start the project is OMR 4.9 MILLION. A scrap value of OMR 450,000 is expected to be received at the end of five years. There is some uncertainty about what price can be charged for the units produced by the investment project, as this is expected to depend on the future state of the economy. The following forecast of selling prices and their probabilities has been prepared:

State of Economy	Weak	Medium	Strong
Probability*	30%-40%	40%-50%
Unit Selling Price*	20-30	30-40	40-50
Units Sold*	60,000	70,000	80,000

*Pick any number between the ranges for your analysis.

Incremental overheads of OMR 300,000 will be paid during the first year while overhead inflation of 10% per year is expected.

Indiana Inc. has traditionally used a nominal aftertax discount rate of 11%.

1. Calculate the payback period,
2. Discounted payback period,
3. net present value,
4. internal rate of return
5. and comment on its financial acceptability.