Jirani Chemists is putting up a $5-$year project. The project is expected to generate the following sales revenue:

Year $12345$

Sales Revenue $750,000780,000700,000900,000950,000$

The project requires an initial cash outlay of one million shillings and annual operating expenses of Kshs $300,000$ p$.$a$.$ the project will have a salvage value of Kshs $200,000$ at the end of its economic life. The firm applies a straight$-$line method of depreciation for all new projects. All the income will be subjected to a tax rate of $40\%.$ The cost of capital is $12\%.$

Required:

a$)$ Prepare a schedule to show the cash flows generated by the project.

b$)$ Evaluate the project using the following techniques:

i$)$ Regular payback period

ii$)$ Discounted payback period

iii$)$ ARR

iv$)$ NPV

v$)$ Internal rate of return

vi$)$ Profitability index