A companynis considering a cost saving project, This involves purchasing a machine costing $ $70000$ whichnwill result in annual savings $($in real terms$)$ On wage costs of $$1000$ and on material cost $$400\text{'}$

The following forecasts are made of the ratios of inflation each year for the next five years

wage costs $10\%$

material cost $5\%$

General prices $6\%$

The cost of capital of the company $,$ in real terms $,$ is $8\mathrm{.}5\%.$ Calculate the NPV of the project $,$ assuming that the machine has a life of five years and no scrap value