Given info: ABCD Corp. is expecting a new project to start producing cash flows beginning at the end of this year. They expect $640,000, $670,000, $775,000, $800,000, and $735,000 at the end of each year for the next 5 years, respectively. Investors require a rate of return of 12.25% per year and the initial investment is $1,250,000. The firm requires all projects to have a 2-year payback period.

Q1.

-A- What is the net present value of this cash flow stream? Round to the nearest $0.01.

-B- What is the IRR of the project? Round to the nearest 0.01%

-C- What is the payback period of the project? Round to the nearest 0.01.

-D- Based on your answers in Q. A through C, should the firm accept the project? Why or why not?

Note: Please show all work or write in complete sentences, if necessary. If you use the financial calculator to show your work, then please list the inputs you entered into the financial calculator.