Tired of being a mediocre corporate lawyer, Cyril decides to pursue an education in accounting to boost his earning power. The education costs him $60,000 in year 0, which will increase his after-tax labor income by $15,000 yearly for the next 20 years. Cyril considers this education choice problem an investment project and uses a discount rate of 12%.

1.What is the payback period of the project?

2.What is the profitability index of the project?

3.What is the IRR of the project?

4.What is the NPV of the project?

5.What is the equivalent annual annuity (EAA) of the project?