A company is considering a proposal to invest $30,000 in a project that would provide the following net cash flows:
| Year 1 |
$6,500 |
| Year 2 |
$10,700 |
| Year 3 |
$15,000 |
| Year 4 |
$12,800 |
1) What is the project's payback period?
2) Compute the net present value of the project assuming a 10% discount rate with the following factors: PV factors for $1(yr 1: 0.9091; yr 2: 0.8264; yr 3:0 .7513; yr 4: 0.6830)
3) Should the company invest in the machine? Explain.