1. Given the following set of cash flows for a project, calculate the Payback, Discounted Payback and Accounting Rate of Return. Assume a cost of capital of 10%. Assuming that this is an independent project, should the project be accepted? Why or why not?

Year Cash Flow Net Profit Depreciation

0 -$125,000

1 $22,000 $15,000 $10,000

2 $58,000 $43,000 $25,000

3 -$30,000 $24,000 $21,000

4 $35,000 $28,000 $18,000

5 $28,000 $20,000 $15,000

6 $60,000 $52,000 $11,000

And now Construct an NPV profile for the project above and explain what you find.