(calculations:need one by one step)

Question 3 You are evaluating a project that will cost $500,000 but is expected to produce cash flows of $125,000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 11% and your company preferred payback period is 3 years or less. 3.1 What is the payback period of this project? (10%) 3.2 Should you take the project if you want to increase the value of the company? (10%) 3.3 Explain why the NPV rule is the most accurate and reliable investment decision rule. (1373%) (Total 3373%) Continued Overleaf/ 3