Parkes Mouldings Limited is considering a new three year project which has the following forecasts: Initial investment Year 1 Year 2 Year 3 Initial investment 730,560 Incoming cash flow 415,500 362,500 175,000 Disposal proceeds 59,000 1. The payback period in years and months is: a) 1 year and 8 months b) 1 year and 10 months c) 2 years and 11 months d) 2 years and 8 months (4 marks) 2. If the business has a cost of capital of 12%, the net present value of the project is: a) 826,562 b) 67,404 c) 96,002 d) 25,396