1. (8 marks) (Investment) 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 Good Average Poor Year 1 30(),000 250,000 200,000 Year 2 350.()( 275,000 225,000 Year 3 )(1,1100 325,000 250,000 Year 4 350.00() 275,000 225,000 Year 5 iU,000 175,000 150,000 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 fron 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 S250,000. 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