Problem 8.1: (sample project evaluation) You are looking at a new project and have estimated the following cash flows, net income and book value data. Your required return for assets of this risk is 12%. (a) Find the NPV, (b) should the firm take on this project? Year 0: CF -165,000 Year 1: CF 63,120 70,800 91,080 Year 2: CF Year 3: CF Problem 8.2: (computing payback for a project) Assume that you are the manager of a firm and you face the cash flow schedule above (see problem 8.1). (a) Find the payback period. (b) If your company's decision rule is to reject any project with a payback period greater than three years, would you accept the project (what if the rule was two years?)