Hewlett-Packard (HP) is evaluating a project requiring an initial investment of $850,000. The asset will be depreciated over five years at 20% per year. The projected cash flows are:

Year	Inflow ($)	Outflow ($)
Year 1	240,000	100,000
Year 2	250,000	105,000
Year 3	260,000	110,000
Year 4	270,000	115,000
Year 5	280,000	120,000

a. Calculate the internal rate of return (IRR).
 b. What is the payback period?
 c. Assuming a cost of capital of 10%, what is the net present value (NPV) of the cash flows?
 d. Should Hewlett-Packard accept the project?