New equipment purchase. Presentation Graphics prepares slides and other aids for individ¬

uals 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 ofreturn. 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 ofreturn.