The Ministry has a project in the city to develop a new road system. The expected cash flows are as below. The funds for this project were obtained from an African Development Bank loan that is repayable three years from now. Diplomatic experts have advised that for the sake of maintaining the country's international good standing, the project must only be taken if it is viable on the discounted payback basis. Finance experts have also advised that the cost of capital applicable for this project is 8%.

(a) Calculate the project's discounted payback period

(b) explain whether the investment is viable given the requirement that the loan should be paid back in Three (3) years and the discounted payback period calculated above.

Year Cash flows (S) (20,000) 8,000 12,000 4,000 2,000