I need help on this and don't understand the payback period calculation and if I even have the right number. Please help and explain so I can understand. Thank you.

Case #4 The Pizza Dough Machine (10 points) As the owner of a pizza parlor, you are considering whether to buy a fully automated pizza dough preparation machine. Your staff is wildly supportive of the purchase because it would eliminate a tedious part of their work. Your accountant provides you with the following information: The cost, including shipping, for the pizza machine is $25,000. Cash savings, including labor, raw materials, and tax savings due to depreciation, are $3,500 per year for 10 years. R=10 percent. As you arrive at the pizza parlor in the morning, the staff is in a festive mood because word has leaked out that the new machine will save the shop $35,000 and only cost $25,000. 1. Calculate the payback period, internal rate of return, net present value, and the profitability index of the proposed endeavor. Payback Period: Year 0 1 2 3 4 5 6 7 8 9 10 Internal Rate of Return: Year Cash Flow Cumulative Cash Flow -25000 -25000 3500 -21500 3500 -18000 3500 -14500 3500 -11000 3500 -7500 3500 -4000 3500 -500 3500 3000 3500 6500 3500 10000 Cash Flow 0 -25000 1 3500 2 3500 3 3500 4 3500 5 3500 6 3500 7 3500 8 3500 9 3500 10 3500 7% Net Present Value: PV(Proje 46506.00 PV (Future) NPV = 21506 25000.00 PV (Cost) 21505.98 NPV Profitability Index: 2. Based on your analysis, should the owner of pizza parlor buy the pizza dough machine? Year 0.86024 The machine costs $25,000, and the present value of the cost savings is $21,506. Due to the cost of the machine excee right choice is to not buy the new dough preparation machine CF 0 1 2 3 4 5 6 7 8 9 10 RR -25000 3500 3500 3500 3500 3500 3500 3500 3500 3500 3500 NPV -25000 -25000 3181.81818 -28181.8182 2892.56198 -31074.3802 2629.6018 -33703.982 2390.54709 -36094.5291 2173.22463 -38267.7537 1975.65876 -40243.4124 1796.05341 -42039.4659 1632.77583 -43672.2417 1484.34166 -45156.5834 1349.40151 -46505.9849