Mulungushi Innovatives made considerations of purchasing capital equipment whose associated cash flows were as follows;

Initial Investment K100, 000
Year One K200, 000
Year Two K300, 000
Year Three K400, 000
Year Four K500, 000
Year Five K100, 000
Average PBIT K93,500
Total Accumulated Depreciation K32,500
Taxation K15,200




i. What is the Payback period in years through months to the number of days for the project? (5 Marks)
ii. Calculate the Accounting Rate of Return (3 Marks)
iii. Calculate the Net Present Value (7 Marks)
iv. Calculate the Internal Rate of Return(8 Marks)
v. Calculate the Profitability Index (2 Marks)
vi. In summary what are the advantages and Disadvantages of each of the Methods.
(5 Marks)