Purchase of Machine. Blue Ridge Spring Water Company sells clear, clean, bottled spring water to both business and residential customers. The current demand for the product exceeds the firm's ability to bottle the water in sufficient quantities to meet the demand. New equipment that would speed up the bottling process and increase the available supply is available. The equipment costs $80,000 and has an expected five-year life, with no salvage value. Equipment now being used could be scrapped for $10,000. Increased sales should increase contribution margin by $30.000 per year, although fixed cash operating costs will increase by $5,000 per year. The firm's cost of capital is 14 percent. Required: Determine the following:.

a. Net present value.

b. Profitability index.

c. Time-adjusted rate of return. (Note: Estimate to the nearest percent.)