1. ABC is considering buying a machine for $250,000, that will reduce material costs for the next 5 years by $90,000 a year. It will require maintenance of $10,000 per year and can be sold at the end of 5 years for $50,000. ABC has a required rate of return of 8%. Should they go ahead? Why/why not?

2. What is the payback period for the project in question 1?