Honda Motor Company is considering a project that requires an initial investment of $450,000. The asset will be depreciated over five years at 20% per year. The cash flows are expected to be:

Year	Inflow ($)	Outflow ($)
Year 1	140,000	60,000
Year 2	150,000	65,000
Year 3	160,000	70,000
Year 4	170,000	75,000
Year 5	180,000	80,000

a. What is the payback period?
 b. Calculate the accounting rate of return (ARR) each year and the average.
 c. Assuming a cost of capital of 10%, what is the net present value (NPV) of the cash flows?
 d. Should Honda Motor Company accept the project?