A business is considering a project which would last 5 years and have an initial investment of $\$ 40,000$ in machinery. At the end of the project the machinery would have a scrap value of $\$ 4,000$. The project would provide annual net cash inflows as follows:

The company has a target payback period of 2.5 years and new projects must also provide and average accounting rate of return of at least $15 \%$ p.a. Advise the company on whether this project meets the company's targets.

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Year 12345 Net cash flow ($000) 16 20 12 12 10