SOA Inc. is considering growing, thus, SOA Inc. decides to invest in new IT expected to cost $1,000,000. They estimate the salvage value to be $0 at the end of 10 years, so depreciation will be $100,000 per year. They estimate that profits will increase by $250,000 per year. SOAs cost of capital is 10%.

Required: Calculate (a) the payback period, (b) the accounting rate of return, (c) the net present value, and the (d) internal rate of return. (e) Advise Coop on whether he should invest, and why? (Note: Students are allowed to use any computer device or calculator. If it is necessary, your computed answers can be rounded to zero decimal places).