Johnson & Johnson is considering a project requiring an initial investment of $350,000. The asset will be depreciated over five years at 20% per year. The expected cash flows are:

Year	Inflow ($)	Outflow ($)
Year 1	120,000	50,000
Year 2	130,000	55,000
Year 3	140,000	60,000
Year 4	150,000	65,000
Year 5	160,000	70,000

a. What is the payback period?
 b. Calculate the accounting rate of return (ARR) each year and the average.
 c. Assuming a cost of capital of 8%, what is the net present value (NPV) of the cash flows?
 d. Should Johnson & Johnson proceed with the project?