a) A company is considering buying a new machine for $40,000. The machine is expected to save the company $16,000 for each of the next 5 years. The cost of the machine will be depreciated evenly over the next 5 years, with no salvage value. Compute the machine's simple rate of return. Ignore income taxes.

b) What is the present value of a 10-year, $30,000 after-tax annual cash flow stream at 10%? Assume the cash flows occur at the end of each period.

c) RNXD Inc. has the opportunity to market a product for 5 years under a specialty contract. The product will provide the company with net cash flows of $280,000. The investment calls for an initial working capital investment $800,000. The investment also calls for the purchase of equipment for $350,000. The machinery will have a salvage value of $40,000 at the end of the contract. RNXD Inc. is subject to a 20% discount rate. The company is also subject to a tax rate of 45%. The net present value of this investment opportunity is?