A company is considering the purchase of a $27,000 machine that would reduce operating costs by $7,000 a year. At the end of the machine's five-year useful life, it will have zero salvage value. The company's required rate of return ins 12%.

1. Determine the net present value of the investment in the machine.

2. What is the difference between the total, undiscounted case inflows and cash outflows over the entire life of the machine?