(Q27Q30) Your restaurant’s new project, creating a glutenfree menu, is expected to have the following cash flows. The company requires a project to have a payback period less than 2 years. The company’s required rate of return is 18%.
Year  Cash Flows  Cumulative cash flows 
0 
$850,000 

1 
$300,000 

2 
$400,000 

3 
$500,000 
What is the project’s payback period? (Calculate it by filling out the cumulative cash flows column)
A. 3 years
B. 1.7 years
C. 2.3 years
D. 2.8 years
What is the project’s net present value (NPV)?
A. –$4,173.5
B. $4,173.5
C. $350,000
D. –$10,800.96
What is the project’s internal rate of return (IRR)?
A. 27.95%
B. 7.72%
C. 15.50%
D. 17.72%
If this project is an independent project, will you accept it?
A. Yes
B. No
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