MedEquip Ltd. is evaluating an investment in new medical equipment costing $600,000, with an expected life of 7 years and no residual value. It will be depreciated using the straight-line method. The project requires $70,000 in additional working capital, recoverable at the end of year 7. The company’s hurdle rate is 11%.

Cash Flows:

• Year 1: $110,000
• Year 2: $120,000
• Year 3: $130,000
• Year 4: $140,000
• Year 5: $150,000
• Year 6: $160,000
• Year 7: $170,000

Requirements:

1. Calculate the Payback Period.
2. Compute the NPV.
3. Determine the IRR.
4. Calculate the PI.
5. Assess the investment decision based on financial analysis.