A company can purchase a machine now for Tk. 10,000. The company accountant estimates that the machine will contribute Tk. 2,500 per annum to profits for five years, after which time it will have to be scrapped for Tk. 500. Find the NPV of the machine if the interest rate for the period is assumed to be 5 percent. (Assume, for simplicity, that all inflows occur at year ends) 2. If the net present value at 8% was Tk. 450,000, what is the maximum amount that the company could invest now in the product if it is to be met a target of an 8% return?

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