PepsiCo is evaluating a project requiring an initial investment of $400,000. The asset is depreciated over five years at 20% per year. The projected cash flows are as follows:

Year	Inflow ($)	Outflow ($)
Year 1	130,000	50,000
Year 2	140,000	55,000
Year 3	150,000	60,000
Year 4	160,000	65,000
Year 5	170,000	70,000

a. What is the payback period?
 b. Calculate the profitability index (PI).
 c. Assuming a cost of capital of 9%, what is the net present value (NPV) of the cash flows?
 d. Should PepsiCo undertake the project?