12. (6 points) Persian Incorporated is considering the purchase of a $500,000 machine to manufacture a specialty tap. The machine is expected to have a 5-year useful life with a terminal disposal value of zero. The firm uses the straight-line depreciation. The salvage value is expected to be zero at the end of the machine's useful life. Persian uses an 8% required rate of return on investments and pays taxes at a 20% tax rate. The amount that the new machine will reduce pre-tax current annual operating expenses are as follows: Year Annual Cash Savings 1 $ 40,000 2345 70,000 100,000 170,000 200,000 a. Calculate the payback period of this project. b. Calculate the Net Present Value (NPV) of this project.