XYZ Corporation is considering a new project with an initial investment of Rs.4,00,000. The project is expected to yield the following cash inflows:

• Year 1: Rs. 1,00,000
• Year 2: Rs. 1,50,000
• Year 3: Rs. 1,20,000
• Year 4: Rs. 1,00,000

The project will be depreciated using straight-line method over 4 years. The tax rate is 35% and the company requires a 14% return on its investments.

Required:

1. Determine the Payback Period and ARR.
2. Calculate the NPV and Profitability Index.
3. Compute the IRR.
4. Should the project be accepted based on NPV and IRR?