PROBLEM 1 (Based on 14.1) Cerritos Clinic is evaluating a project that costs $850,750 and has expected net cash flows of $147,000 in Year 1, increasing by 6% each year for eight years. The first inflow occurs one year after the cost outflow, and the project has a cost of capital of 8.25 percent. a. What is the project's payback? b. What is the project's NPV? Its IRR? c. Is the project financially acceptable? Explain your answer. ANSWER a. Create a table of cash flows for the project: Annual Cumulative Year Cash Flow Cash Flow 0 1 2 3 4 5 6 7 8 a. Payback: b. NPV: C. IRR: