12-4 The Presley Company wishes to replace a current operation with a more ef- ficient and reliable automatic process. This plan requires the purchase of a machine with a net cost of $35,000 and an estimated useful life of seven years. It will be depreciated over a seven-year period on a straight-line basis for tax purposes. The machine is expected to have no salvage value at the end of seven years and to reduce operating costs by $8,000 per year. The firm's marginal tas rate is 46 percent and its cost of capital is 5 percent. Determine (a) the payback! period, (b) the average accounting rate of return, (c) the net present value, (d) the profitability index, and (e) the internal rate of return