1. Evaluate the following investment project. There is an opportunity to invest $50000 in new automated packaging machine in a small copackaging company. This will enable to save $20000 per annum during next 4 years. The machine will retire afterwards and will be scrapped at zero value. Assume that savings occur in Y1, Y2, Y3 and Y4, while investment is done in Y0. Cost of capital is 12%. - Evaluate this project: calculate payback, net present value and IRR of the project.

Company has simple investment decision thresholds 3 years of payback and IRR of 25%. Please, comment on whether the project should be approved. 2. Evaluate the following investment opportunity. A business opportunity will generate $10000 in cash per year starting from the end of 3 rd year after this business opportunity is purchased. What is the present value (PV) of this business opportunity on the date that it is purchased, given that the interest rate is 12%?