Q 16.29: A project will cut labor cost and improve productivity. Due to higher manufacturing speed, capacity will increase, resulting in improved revenue of $1,200,000 annually. Labor cost reductions will total $250,000 annually. The machine will be depreciated on straight-line basis over eight years. Additional fixed costs will total $175,000 and increased variable costs will be $125,000 per year. If the initial investment equals $6,500,000 and the company has a five-year cutoff period under payback period method, should this project be accepted? Yes, the payback period is 4.48 years. B Can't say because the payback period is indeterminate. No, the payback period is 5.65 years. No, the payback period is 7.26 years