Microsoft Corporation is considering a project that requires an initial investment of $250,000. The asset is depreciated over five years at 20% per year. The cash flows are expected to be:

Year	Inflow ($)	Outflow ($)
Year 1	80,000	30,000
Year 2	90,000	35,000
Year 3	100,000	40,000
Year 4	110,000	45,000
Year 5	120,000	50,000

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 10%, what is the net present value (NPV) of the cash flows?
 d. Should the project be accepted?