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A small industrial machine costs $100 000 and is expected to earn annual net cash inflows of $44 000, 140,000, $36 000 and $32 000,

A small industrial machine costs $100 000 and is expected to earn annual net cash inflows of $44 000, 140,000, $36 000 and $32 000, before it wears out sufficiently to be unreliable and must be sold for an estimated $10000 Required: Calculate for the following scenarios: (a) If funds earn 8 per cent, what is its NPV? (b) If funds earn 5 per cent, what is its NPV) (c) Advise management on the purchase of the machine.

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