A company is analysing two available machines and wishes to purchase only one alternative, considering their fund constraints. First Machine will be having initial outlay of $400,000, with a scrap value of $20,000 after 5 years, and the second machine requires an initial outlay of $3,00,000, with zero salvage value after 5 years. The companys tax rate is 40%. Profits before Depreciation and Taxation are given as under: Years Profit Machine 1 ($) Profit Machine 2 ($) 1 126,000 120,000 2 166,000 200,000 3 136,000 180,000 4 146,000 180,000 5 150,000 150,000 You are required to analyse both alternatives on the basis of Payback Period and NPV . Take discount rate 12%