Q3. A project has the following cash flow with a discount rate of 12%:

Annual cash flows:

Year 0 $ -520,000

Year 1 $ 170,000

Year 2 $ 210,000

Year 3 $ 225,000

Year 4 $ 195,000

$520,000 is used in purchasing an equipment for the project only.

Compute the following:

A) Payback period

E) Average Accounting Return, assuming that the cash flow shown is the income before tax and depreciation and ignoring the tax effects.

Show all the workings step-by-step, not in a table