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