You are considering a project with an initial cash outlay of $80,000 and expected free cash flows of $20,000 at the end of each year for 6 years. The required rate of return for this project is 10 percent.
a) What is the payback period of the project?
b) What is the project’s NPV?
c) What is the project’s IRR?
d) If your firm has a required payback of 2 years and passing the IRR and NPV, would you accept this project? Explain.