At the beginning of $1990,$ a company is considering investing in a replacement plant. The details of the

investment and the expected savings over five years are as follows:

You can assume that the returns in year $5$ include the proceeds from the disposal of the plant and that

the project has a $5-$year life.

Required:

Calculate the payback period for the project.

Calculate the net present value $($NPV$)$ for the project at a $12\%$ cost of capital.

Calculate the profitability index $(\frac{?}{PI})$ for the project.

Make a reasoned recommendation on whether to accept or reject the project.