Assume that you are a financial analyst for Tangshan Mining Company and are given the following

information about the firms new project: the projects initial after-tax cost at t = 0 is $5,000,000 and

the project is expected to provide after-tax operating cash inflows as follows:

Year	Cash Inflow:
One	$1,800,000
Two	$1,900,000
Three	$700,000
Four	$1,800,000

a. Calculate the payback period for this project.

1. If the maximum acceptable payback period is 4 years, should this project be accepted? Why or why not?

b. Assume that the firms Weighted Average Cost of Capital (WACC) is 12%. Calculate the

Net Present Value (NPV) for the above project.

c. Based on your NPV calculations above, should this project be accepted? Why or why not?