A company is considering purchasing a machine that would cost $756,000 and have a useful life of 8 years. The machine would reduce cash operating costs by $132,632 per year. The machine would have a salvage value of $151,200 at the end of the project. Assume the rate of NPV is 15%.

Compute:

a.Net present value

b.Internal rate of return

c.Profitability index

d.Payback period

e.Simple rate of return

f.Should the company purchase the machine? Why or why not?