Westgate farms is considering purchasing a harvester for crops, with this purchase it is estimated that this purchase will increase the farms revenue by 240% through contracting work. The purchase of the harvester will cost $700,000, and will have a lifespan on 20 years, after the 20 years the harvester will have a value of $42,000. However, after 10 years of intensive use the harvester will require a full service and replacement parts at a value of $462,000. It is expected that the harvester will contribute an additional $161,000 per year in after tax cash flow. (A discount rate of 10% is being used)

A) Calculate the profitability index and the internal rate of return for the harvester (with all calculations!)

B) In a table provide the figures of the calculated payback period, along with the discounted payback period