Traditionally, Granite Company has accepted a proposal only If the payback perlod is less than $50$ percent of the asset's useful life.

Peggy Casteel is the new accounting manager. She suggested to management that capital budgeting decisions should not be made

based solely on the payback period. Granite Company Is currently considering purchasing a new machine for the factory that would

cost $$112,000$ and be sold after $8$ years for $$50,000.$ The new machine will generate annual cash flows of $$30,000$ in its first year of

use, $$24,000$ in its second year of use, $$20,000$ in the third year, and $$14,800$ each year thereafter. The company's cost of capital is $12$

percent.

Requlred:

$1-$a$.$ Complete the table glven below.

$1-$b$.$ Calculate the payback perlod.

$1-$c$.$ Would Granite Company accept this project based solely on the payback perlod?

$2-$a$.$ Complete the table given below and calculate NPV$.$

$2-$b$.$ Would Granite Company accept this project If the NPV method is used to evaluate the machine?

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Req $1A$

Req $1B$

Req$2A$

Req$2B$

Complete the table given below and calculate NPV$.($Future Value of $$1,$Present Value of $$1,$ Future Value Annuity of

$$1,$ Present Value Annuity of $$1.$

Note: Use appropriate factor$($s$)$ from the tables provided. Negative amounts should be indicated by a minus sign. Round final

answers to the nearest whole dollar amount.

Show less $A$