Question: Your company decides to look into expanding their production capacity. A new production line, with all facilities, will cost $10 million. Based on current production costs, your accountants project the following gross profits for the first five years of production:

Year 1 - $1.8 million

Year 2 - $2.7 million

Year 3 – $3.6 million

Year 4 - $4.8 million

Year 5 - $4.4 million

What is the internal rate of return (IRR) for this plant expansion over the first five years based on gross profits? What is the simple payback based on the breakeven point? What is the simple rate of return using an annualized gross profit?