A project proposal requiring P840,000 initial investment will result to annual cash return as follow:

Year 1 P 55,000

Year 2 P 150,200

Year 3 P 275,000

Year 4 P 350,700

Year 5 P 245,000

Year 6 P 120,400

Required:

a. If the current cost of funds is 8% and the decision criteria are the net present value and discounted payback, should the project be accepted?

b. The project's payback period and internal rate of return?