JBL Plc is considering the investing in a new business with initial outlay of £210,000.The finance manager estimates that the new machine maintenance costs is £20,000per year, payable at the

end of each year of operation. The maintenance costs isexpected to increase by 10% per year. Sales will be £80,000 in the first year, expectedto increase by 20% per year for two years, declined by 20% in the fourth year and by50% in the fifth year.The views of the directors of JBL Plc are that all investment projects to be evaluatedover five years of period with an assumed terminal value at the end of the fifth year of£45,000. JBL Plc expects a maximum payback period of three years. The discountrate for the project is 15%. Calculate the payback period for the new project. What is the NPV for the new project? What is the IRR for the new project? Comment on the financial acceptability of the proposed investment based on thethree appraisal methods used. e. The company set the maximum payback period at three (3) years. Discuss thepossible reasons necessitate the company to have such a low benchmark paybackperiod? f. Identify the strengths and weaknesses of the following: (i) payback period, (ii)accounting rate of return (ARR), and (ii) internal rate of return (IRR).