3.a Net Present Value: Cash Saving $132,632 PVIFA (15%,8) 4.4873 PV of cash flow A $595,160 Salvage Value $151,200 PVIFA (15%,8) 0.3269 PV of salvage value B $49,427 PV of Inflow A+B $644,587 Less: Initial Investment $756,000 NPV $111 413 3.b Internal Rate of Return (IRR) Amount of cash inflows = $1,212,256.00 Annuity =$1,212,256.00 / 8 = $ 151,532 Payback period = $756,000 / $ 151,532 = 4.98 years