The companys average reported net incomeis $1,250,000.The team is considering the following options. Option 1: The asset cost is $300,000. The asset is expected to have a 10-year useful life with no salvage value. Straight-line depreciation is used. The net cash inflow is expected to be $89,000 each year for 10 years. The company uses a 12% discount rate in evaluating capital investments.

What are the following?

Payback period(assume that cash inflows occur evenly throughout the year)

ARR based on the initial investment

NPV(assume that cash inflows occur at year-end)

Internal rate of return (IRR)

Present Value Index