Please solve this question using Newton Method as specified in the question not by using Excel.

1. (8 marks) You are considering a 5-year investment project which is expected to cost $1,000,000. In each year, you have decided that there are 3 possible states of the economy: good, average, and poor. In each individual year there is a 35% chance of the economy being good and a 15% chance of it being poor. You forecast the following net cashflows for the project: Economy Year 1 Year 2 Year 3 Year 4 Year 5 Good 300,000 350,000 400,000 350,000 250,000 Average 250,000 275,000 325,000 275,000 175,000 Poor 200,000 225,000 250,000 225,000 150,000 You have arranged the following sources of funding: (i) $200,000 from a 5-year fixed interest loan whose annual loan payments are $48,126.91. (ii) $250,000 from a 5-year zero-coupon bond with a face value of $350,000. (iii) $300,000 from an ordinary share issue where a dividend of $18,000 will be paid in one year and it is expected to grow at 3% per annum. (iv) $250,000 from a 5-year coupon-paying bond issue whose coupon rate is 7% and face value is $250,000. Should you invest in the project? (Use discrete compounding.) Note: For the part involving Newton method, choose yo = 0.0655 and apply only one iteration