For a new project you have estimated the following cash flows:

Year 0: CF = -200,000

Year 1: CF = 65,200; NI = 20,600

Year 2: CF = 90,250; NI = 33,300

Year 3: CF = 70,000; NI = 49,100

Average Book Value = 72,000

Required return for assets of this risk is 12% for similar risk projects, for lower risk projects the required return is 6% and for higher risk is 18%.

a. Calculate the Net Present Value.

b. Calculate Internal Rate of Return.

c. Calculate Payback Period. Using the Payback Period answer, would you invest in the project if the present limit was 2 years?

d. If the NPV is equal to Zero, why would you accept the project? (one line)