Acer is considering a new product line to supplement its range line. It is anticipated that the new product line will involve cash investment of $43216 at time 0. After- tax cash inflows of 5% of $432161 are expected in year 1, 7% of $432161 in year 2, 9% of $432161 in year 3, and 11% of $432161 in year 4. Though the product line might be viable after year 4, Acer prefers to be conservative and end all calculations at that time.

1. If the required rate of return is 11.35%, what is the net present value of the project? Is it acceptable? Why and why not?

2. What is its internal rate of return? Is it acceptable? Why and why not?

3. What is the project's payback period? Is it acceptable if the maximum allowable time is 1.75 years? Why and why not?