Question #$1(7\mathrm{.}5$ marks$)$

ABC Corporation wants to buy a new warehouse inventory system. They expect the savings $($cash

flows$)$ generated in the next five years to be generated as per Table $1.$ The value of the inventory

system is $$70,000$ and ABC Corp. cost of capital is $11\%.$

Calculate the Payback, Net Present Value $($NPV$)$ and Internal Rate of Return $($IRR$)$ of this investment.

Based on the three capital budgeting tools, should ABC corporate invest in the warehouse inventory

system?