The following information must be used to answer Questions $5-7$

Zyada Paisa Limited has $1,600,000$ to invest. The company is considering a few investment projects but only has sufficient cash to accept one of them.

The projected cash flows of the most likely $($project Sona$)$ are shown below. The directors have asked for your help and advice in reaching a decision on whether to accept this project.

The company requires that investments are required to achieve a minimum target of Accounting Rate of Return $($ARR$)$ of $18\mathrm{.}0\%$ and a maximum acceptable Payback period of $4$ years. The company$$s cost of capital is $9\%.$

Sona

Cash flows $000$

Initial investment $(800)$

Cash inflows year $1250$

Cash inflows year $2300$

Cash inflows year $3200$

Cash inflows year $4200$

Cash inflows year $5150$

Cash inflow from sale of the investment at the end of year $5100$

$5.$ Using the information above, what is the Payback period for project Sona $($Calculate to the nearest whole month$)?$

A$)2$ years $10$ months.

B$)3$ years $3$ months.

C$)3$ years $5$ months.

D$)2$ years $3$ months.

$6.$ Using the information above, what is the Accounting Rate of Return for project Sona? $($calculate to the nearest $1$ decimal place$)?$

A$)13\mathrm{.}8\%$

B$)48\mathrm{.}8\%$

C$)17\mathrm{.}8\%$

D$)30\mathrm{.}2\%$

$7.$ Using the information above, what is the Net Present Value for project Sona?

A$)75\mathrm{.}4$

B$)+75\mathrm{.}4$

C$)140\mathrm{.}4$

D$)+140\mathrm{.}4$