Buchan Enterprises is considering investing in a new machine. The machine will be purchased on 1 January in Year 1 at a cost of £50,000. It is estimated that it will last for five years, and it will then be sold at the end of the year for £2000 in cash. The respective net cash flows estimated to be received by the company as a result of purchasing the machine during each year of its life are as follows:

The company’s cost of capital is 12 percent.

Required:
Calculate:
(a) The payback period for the project
(b) Its discounted payback period.

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Year 1 2 نیا 3 4 5 £ 8 000 16 000 40 000 45 000 35 000 (excluding the initial cost) (exclusive of the project's sale proceeds)