Exxon is considering drilling for oil in the gulf coast near Texas. The proposed drilling site has the following information:

(a) A rig will need to be setup which costs $1,200,000,000 in Year 0.

(b) It will actually cost $100,000,000 for Exxon to shut down the rig and comply with EPA regulations at the end of its useful life (in Year 20).

(c) The rig will produce operating cash flows of $150,000,000 a year for 20 years.

(d) Exxons discount rate on new drilling projects in the gulf coast is currently 19%. a) What is the payback period, in years for this project? b) What is the projects NPV? c) Is the projects IRR over, under, or exactly 19%? d) Should the project be accepted under the payback rule? Under the NPV rule? Under the IRR rule?