Question: A corporation is considering purchasing a machine that will save $130,000 per year. The operating expenses including maintenance and depreciation, is $60,000 per year. The

A corporation is considering purchasing a machine that will save $130,000 per year. The operating expenses including maintenance and depreciation, is $60,000 per year. The machine will be needed for five years, after which it will have a $20,000 value. Straight line depreciation will be used. If the purchase price is $220,000, what is the cash payback? its cost of capital is 10%. What is the NPV?

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