Your firm is considering a proposed project, which lasts three years and has an initial investment of $200,000. The after-tax operating cash flows are estimated at $60,000 for year one, $120,000 for year two, and $135,000 for year three. The firm has a target debt/equity ratio of 1.2. The firm's cost of equity is 14% and its cost of debt is 9%. The tax rate is 34%. Please answer the following:
A. Calculate the net present value. Should the farm accept the project?
B. Calculate the profitability index. Should the firm accept the project?
C. Calculate the Payback method. Should the firm accept the project?