Rachel Ltd. is buying a business corporate car at a cost of $3,500,000. The corporate car is expected to generate cash flows of $95000, $186,000, and $188,000 over the next 3 years. Assume same as last 3 years, company set target to recover initial outlay by 2 years. What is the payback period and should the project be accepted (i.e. yes or no)?

a.

1.97 years and no

b.

2.37 years and no

c.

2.95 years and yes

d.

2.87 years and no

e.

2.56 years and yes