(Solution) - The following table presents the initial cash outlay and cash flow -(2025 Original AI-Free Solution)

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The following table presents the initial cash outlay and cash flow projections for a new store that TopSports, Inc., is planning to open in Boston, Massachusetts
Initial cash outlay ........ $6,750,000
Net cash inflows?year 1 ..... $2,250,000
Net cash inflows?year 2 ..... $2,250,000
Net cash inflows?year 3 ..... $1,000,000
Net cash inflows?year 4 ...... $700,000
Net cash inflows?year 5 ...... $250,000
Salvage value (at the end of year 5) .. $750,000

The company uses a discount rate of 8% for such project evaluations. The corporate tax rate is 30%. Assume straight-line depreciation for tax purposes.

Required:
a. What is the net present value of the project?
b. What is the payback period for the project?
c. What is the modified payback period for the project?