Traditionally, Granite Company has accepted a proposal only if the payback period 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.

Required:

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

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

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

$2-$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?

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