Atlus Corporation is considering purchasing a new machine for their warehouse. The machine would cost $620,000 and has an estimated useful life of 8 years. Management estimates that the new machine will provide the following net annual cashflows:

Cash Inflows from customers: $200,000

Cash outflows for operating expenses: $60,000

Cash outflows for regular maintenance: $30,000

The company is expecting a salvage value of $30,000 at the end of the machines useful life, and a maintenance expense of $150,000 at the end of year 5. Assume a discount rate of 8%

Required: (8 Marks)

A) Calculate the Net Present Value (NPV)

B) Calculate the Profitability Index

C) Should the company move forward with this capital investment and why or why not?