Primus Corp. is planning to convert an existing warehouse into a new plant that will increase its production capacity by 45 percent. The cost of this project will be $7,125,000. It will result in additional cash flows of $1,875,000 for the next eight years. The company uses a discount rate of 12 percent.

What is the payback period?

What is the NPV for this project ?

What is the IRR?

Annual Cash Flows
0	1	2	3	4	5	6	7	8
$ (7,125,000)	$ 1,875,000	$ 1,875,000	$ 1,875,000	$ 1,875,000	$ 1,875,000	$ 1,875,000	$ 1,875,000	$ 1,875,000