A commercial farm is considering purchasing an automated milking machine to improve day-to-day operations and increase the farms output. To evaluate the purchase, the owner would like to consider capital budgeting criteria, using the not present value (NPV), internal rate of return (IRR), and profitability index (PI) functions. The owner already knows the farms cost of capital.

What additional information does the owner need to perform the analysis?

Rates of return used by other commercial farms

Salvage price of all machines that the farm currently owns

Debt held by the farm and discretionary financing needed for the upcoming period

Incremental cash flows associated with the purchase of the new machine