Assignment 3] Show your work (2 points each).Anderson Petroleum Limited is evaluating a generation project forone of its plants. The project will create the following cashflows:Year012345 Cash Flow-450 000150 000190 000210 000180 000140 000 The appropriate discount rate (or cost of capital) is 15%.1. If the company uses the NPV method should the project beaccepted? Why (or why not)?2. If the company uses the IRR method should the project beaccepted? Why (or why not)?3. The company’s maximum acceptable payback period is 3 years. Ifthe company uses the payback period method should the project beaccepted? Why (or why not)?4. The company’s maximum acceptable discounted payback period is 3years. If the company uses the discounted payback period method should the project be accepted? Why (or why not)? 5. What is the relationship between the discount rate (or cost ofcapital) and the NPV? Are they positively or negatively related?Please explain.
