Hobart Corporation evaluates capital projects using a variety of performance screens, including a hurdle rate of 16% and payback period of 3 years or less. Management is completing a review of a project on the basis of these projections:

• Capital Investment $200,000
• Annual cash flows (after-tax) $74,000
• Straight-line depreciation 5 years
• Terminal value (after-tax) $20,000

The projected internal rate of return is 20%. Which one of the following alternatives reflects the appropriate conclusions for the indicated evaluative measures?

	IRR	Payback
a.	Accept	Reject
b.	Reject	Reject
c.	Accept	Accept
d.	Reject	Accept

Group of answer choices

answer a

answer b

answer c

answer d