A new bottling machine will cost $23,000 initially. The machine will produce after-tax cash flows of $4,000 in the first year and $7,000 each year thereafter for 4 years. Your company's cost of capital is 6%. What is the discounted payback period for this project?

Intro A new bottling machine will cost $23,000 initially. The machine will produce after-tax cash flows of $4,000 in the first year and $7,000 each year thereafter for 4 years. Your company's cost of capital is 6%. 18 Attempt 1/5 for 10 pts. Part 1 What is the payback period for this project? 3.71 Correct Year 0 1 2 3 4 5 Cash flow -23,000 4,000 7,000 7,000 7,000 7,000 Cumulative cash flow -23,000 -19,000 -12,000 -5,000 2,000 9,000 The project has not paid back its initial costs after 3 years (the balance is still negative), but it has after 4 years the balance is positive). The payback period is thus between 3 and 4 years. Assuming that cash flows occur evenly throughout the year, the payback period is 3 + 5,000 / 7,000 = 3.714 years. IB Attempt 1/5 for 10 pts. Part 2 What is the discounted payback period for this project? K+ decimals Submit