(NPV and cash flows) The ABD Company is considering buying a new machine for one of its factories. The machine cost is $100,000, and its expected life span is 8 years. The machine will be depreciated on a straightline basis to a salvage value of zero; nevertheless, the company anticipates that it can sell the machine at the end of year 8 for $15,000. The machine is expected to reduce the production costs by $25,000 annually. If the appropriate discount rate is 15% and the corporate tax is 40%:

a. Calculate the project’s NPV.

b. Calculate the project’s IRR.