Question 1 (25 marks) - Capital Budgeting Deluxe Piano Company is planning to purchase a machine capable to do certain operations that are no performed manually. The machine will cost $35,000, and it will last for four years. At the end of the fourth year period, the machine will have residual value of zero. However, it is expected that the use of the machine will generate net cash inflow of $9,000 end of year 1, $8,500 end of year 2, $8,000 end of year 3, and $7,600 end of year 4. Deluxe Piano Company requires a minimum return of 8%. Required: a. Compute the net present value (NPV). (14 marks) b. Compute the payback period for this machine. (6 marks) C. Should the machine be purchased? Explain the part (a) and part (b) figure. (5 marks) Answer = (a) Net present value=)