Can someone please explain how B was solved. I understand how to NPV and how 153,000 was found but I don't understand the rest.

Problem 1: Evaluate a project using NPV analysis and the Payback Period Star Helix Security has an opportunity to produce and sell a new type of bicycle lock. To determine whether this would be profitable, they have gathered the following information: New equipment would have to be acquired to produce the locks. The equipment would cost $105,000 and be usable for 12 years. After 12 years, it would have a salvage value equal to 10% of the original cost. Production and sales of the locks would require working capital of $48,000. This working capital would be released for use elsewhere after 12 years. Projected contribution margins are given below: Year 1 Year 2 Year 3 Years 4-12 Contribution Margin $28,000 $48,000 $95,000 $140,000 Fixed costs for salaries, insurance, and maintenance would total $56,000 per year. Straight-line depreciation on equipment would total $7,875 per year. a. Using the information above, determine the net present value of the proposed investment and determine whether it should be accepted if the company's discount rate is 13%. Years Discount Factor Equipment (105,000) Now Working Cap in (48,000) Now Working cap out 48,000 12 years 0.231 Salvage Value 10,500 12 years 0.231 Year 1 CM 28,000 1 year 0.885 Year 2 CM 48,000 2 years 0.783 Year 3 CM 95,000 3 years 0.693 Year 4+ CM 140,000 4-12 years 3.557 Cash Fixed Costs (56,000) 1-12 years 5.918 Note: Discount factor for years 4-12: 5.918 - 2.361 = 3.557 Net Present Value Present Value (105,000) (48,000) 11,088 2,426 24,780 37,584 65,835 497,980 (331,408) $155,285 b. Calculate the project's Payback Period and determine whether the project should be accepted if the company requires a payback period of three years or less: Year Unrecovered at Beginning of year Cash inflow 153000 (28,000) 181,000 (8,000) 189,000 39,000 150,000 84,000 66,000 84,000 Unrecovered at end of year 181,000 189,000 150,000 66,000 UwN In year 5, the cash inflow is larger than what is left to be recovered. So the Payback period is 4 full years plus 66K/84K = 79% of an additional year, or 4.79 years