Presentation Graphics prepares slides and other aids for individuals making presentations. It estimates it can save $42,000 a year in cash operating costs for the next five years if it buys a special-purpose colour-slide workstation at a cost of $90,000. The workstation qualifies for a capital cost allowance rate of 25%, declining balance, and will have a zero terminal disposal price at the end of year 5. Presentation Graphics has a 12% after-tax required rate of return. Its income tax rate is 40% each year for the next five years.

Required

Compute (a) net present value, (b) payback period, and (c) internal rate of return.