A project requires an investment cost of P XXXXXXXXXXwith 5 – year useful life, no salvage value, and uses straight – line method. Other data are the following: Expected sales revenue P XXXXXXXXXX Out...

A project requires an investment cost of P 600 000 with 5 – year useful life, no salvage value, and uses straight – line method. Other data are the following:

 Expected sales revenue                          P 2 000 000

 Out – of – pocket costs                               1 600 000

Tax rate                                                                40%

 Require:

1. Net cash inflows


2. Payback period


3. Assume an investor wants a payback period of 3  years is the proposal acceptable? Why or why not?