Jane plans to open a bike repair shop in Scarborough. She will operate the shop for five years and then she plans to move to the coast. The repair equipment will cost $95,000 and Jane expects the after-tax cash flows to be $26,200 a year.

1. What is the payback period for the project?
2. Assuming a required rate of return of 9.5% for her project what is the IRR?
3. What are the advantages/disadvantages of using each method? Explain.

NB: Please give step-by-step workings and for question 3 please give a proper explantion.