The management of Sonate Company, a wholesale distributor of fashion products, is considering the purchase of a $72,000 machine that would reduce operating costs in its warehouse by $16,000 per year. At the end of the machine's 5-year useful life, it will have no scrap value. The company's required rate of return is 5%. Required: (Ignore income taxes.) 

1. Determine the net present value of the investment in the machine. 

2. What is the payback period for the investment?

Answer rating: 100% (QA)

1 Net Present Value NPV Calculation To calculate the Net Present Value NPV of the investment in the ... View the full answer