IBM is evaluating a project that involves an initial investment of $250,000. The asset is depreciated over five years at 20% per year. The cash flows are expected to be:

Year	Inflow ($)	Outflow ($)
Year 1	90,000	35,000
Year 2	100,000	40,000
Year 3	110,000	45,000
Year 4	120,000	50,000
Year 5	130,000	55,000

a. What is the payback period?
 b. Calculate the internal rate of return (IRR).
 c. Assuming a cost of capital of 9%, what is the net present value (NPV) of the cash flows?
 d. Should IBM proceed with the project?