a) Monster Corp is considering buying a new machine for $420,000. The machine has an 8 year life (S/L)and zero salvage value. The machine will allow monster to save $75,000/year in material and labor. Monster will sell an old machine for $55,000. The sale will take place on the same day the new machine is bought. The old machine a NBV = 0. The new machine will require an overhaul in year 5 = $20,000. Monster has a 30% tax rate. What is the NPV of this investment using a 6% discount rate?

b) Rupert has calculated a NPV = $18,000 regarding an investment in a new machine. Rupert's analysis mistakenly ignored an overhaul to the machine in year 3 costing $6,000. What is the revised NPV after Rupert makes the correction? Assume a 30% tax rate and a 6% discount rate.