XYZ Corporation is considering a project with the following cash flows:

• Initial outlay: $1,200,000
• Project duration: 10 years
• Annual net cash inflows: $200,000
• Cost of capital: 12%
• Discount factors:
  • 10%: 6.145
  • 12%: 5.650
  • 14%: 5.216
  • 16%: 4.833
  • 18%: 4.494

Requirements:

1. Calculate the internal rate of return (IRR).
2. Determine the net present value (NPV) at a 12% discount rate.
3. Compute the profitability index (PI).
4. Calculate the discounted payback period.
5. Assess the impact on IRR if the annual net cash inflows increase by 5%.