Clarabel Ltd is reviewing a capital investment proposal. The initial cost of the projectand the net cash flows for each year are presented in the schedule below. It is estimatedthat there would be no salvage value at the end of the investment's life.Yearinitial cost and carrying amountannual cash flowsannual net profit0$187,5001$87,500$62,500$18,7502$52,500$56,250$21,2503$26,250$50,000$23,7504$8,750$43,750$26,2505$-$37,500$28,750Terry's uses a required rate of return of 8 per cent to evaluate new capital investmentproposals.

You are required to answer all questions. Where necessary round off to two decimal places, do not use formulas to calculate the return rates.

Tables below:

Present value of $1.00 (Uneven)

Periods

8%

10%

12%

14%

16%

18%

1

0.926

0.909

0.893

0.877

0.862

0.847

2

0.857

0.826

0.797

0.769

0.743

0.718

3

0.794

0.751

0.712

0.675

0.641

0.609

4

0.735

0.683

0.636

0.592

0.552

0.516

5

0.681

0.621

0.567

0.519

0.476

0.437

Present value of an ordinary annuity of $1.00 (even)

Periods

6%

8%

10%

12%

14%

15%

1

0.943

0.926

0.909

0.893

0.877

0.870

2

1.833

1.783

1.736

1.690

1.647

1.626

3

2.673

2.577

2.487

2.402

2.322

2.283

4

3.465

3.312

3.170

3.037

2.914

2.855

5

4.212

3.993

3.791

3.605

3.433

3.352

Calculate the project's payback period.

Calculate the proposal's Net Present Value (NPV) for each item

Calculate the accounting rate of return on the investment proposal. Based your calculation on the initial cost of the investment.