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.

Discount Rate:

Year 0 1 2 3 4 5 6 7 8

Project Cash Flows :

a. What is the payback period?

Payback Period (Annuity):

Discount Rate: 12.00%

Year 0 1 2 3 4 5 6 7 8

Project Cash Flows :

Cumulative Cash Flow :

Cumulative Periods :

b. What is the NPV for this project?

NPV (Equation):

NPV (Excel Function):

IRR: