Mr. James, an ardent photographer has decided to take his forsteps on realizing his entrepreneurial dream. He has been mullingover various options and has narrowed them down to 2 options. Mr.James asks for your assistance in resolving the dilemma that hefaces. Option 1 Rent an office at La Lucia Mall and purchase photodeveloping equipment and other devices necessary for this venture.This will involve the actual printing/development of photos,“burning” of CDs/DVD’s, etc. Option 2 Purchase a state of the artNikon Camera Kit and take photos/record videos of special events(weddings, birthdays, anniversaries, etc.). This will entailspending on an advertising campaign in order to aggressively seekmarket share. Project cost and other data Option 1 Option 2 Cost ofinvestments (Total) 400 000 90 000 Expected useful life 5 years 5years Salvage value 50 000 10 000 Cost of capital (After tax) 9%Project Revenues Year 1 150 000 20 000 Year 2 130 000 30 000 Year 380 000 50 000 Year 4 60 000 30 000 Year 5 40 000 15 000 Required:2.1 If James requires a payback period of no more than 3 1/2 yearswhich project should he choose? Show calculations. (8) 2.2 Suggestflaws in the valutitaion method (payback period).(2) 2.3 Use theNPV method to test which project is more viable. (10)