The Bolster Company is considering the following project (Please note is is only 1 project):

Year	Initial Outlay	NPV
0	-$100,000	-$100,000
1	$31,250	0
2	$31,250	0
3	$31,250	0
4	$31,250	0
5	$31,250	200,000

The required rate of return on this project is 12 percent.

a. What is the projects payback period?

b. What is the projects discounted payback period?

c. What is the projects net present value?

d. Calculate the Profitability Index (PI) on this project.

e. What financial principles are important to solving this problem?