A company is planning to purchase new machinery with the following financial details:

• Cost of machinery: $650,000
• Expected useful life: 7 years
• Salvage value: $30,000
• Annual net savings: $110,000
• Tax rate: 20%
• Depreciation: Straight-line method
• Discount rates and present value factors:
  • 8%: 5.873
  • 10%: 5.334
  • 12%: 4.968
  • 14%: 4.628
  • 16%: 4.312

Requirements:

1. Compute the net present value (NPV) at a 10% discount rate.
2. Calculate the internal rate of return (IRR).
3. Determine the payback period.
4. Calculate the accounting rate of return (ARR).
5. Perform a sensitivity analysis on NPV with ±5% changes in annual net savings.