PJ corporation is considering entering the dog food business. To produce dog food the company would need to purchase an oven at $200,000 today (CF0). The oven is projected to last 5 years. PJ’s projected net cash flows for the next 5 years are in the following table. The cost of capital for PJ is 14%.
Year Net Cash Flow
0 -200,000
1 20,000
2 50,000
3 100,000
4 150,000
5 175,000
What is the payback period on this investment? Express your answer in years.
What is the IRR? Express your answer as a percentage with 2 decimals.