Chicks with Kicks is a boxing club for women. The club manufactures all of its own punching bags out of high-quality leather and sand from Los Roques, one of Venezuela's most beautiful beaches. The company is considering investing in a sand refining machine to improve the quality of its punching bags. Details about the machine investment are as follows:

Cost of new machine .............................................. $150,000.00

The expected improvements from the new machine would allow for an increase in membership fees. The CFO expects cash flows from the investment in the first three years to be $89,000, $91,000, and $101 ,000. The company is subject to a 40% tax rate and has a required rate of return of 15% for all investment projects.

1. What is the total present value of the predicted cash inflows from the new machine?

2. Is the investment profitable?