A company is considering a high-tech project lasting seven years. The project requires $1,800,000 of initial investment and generates net cash flows of $400,000, $600,000, $700,000, $500,000, $400,000, $300,000, and $200,000 in years 1 through 7.

The appropriate discount rate (or cost of capital) is 12%.

1. If the company uses the NPV method, should the project be accepted? Why (or why not)?

2. If the company uses the IRR method, should the project be accepted? Why (or why not)?

3. The companys maximum acceptable payback period is 4 years. If the company uses the payback period method, should the project be accepted? Why (or why not)? What is the payback period of the project?