Profit before tax             = 80000

Less tax @ 50%             = 80000 – (80000x 50/100)

Profit after tax               = 40000

Add depreciation @ 12%        = 500000×12/100 = 60000

Profit after tax and before depreciation = 40000+ 60000= 100000

Pay back period             = Cost of project / Annual cash inflow.

= 500000 / 100000 = 5 Years