Company XYZ is evaluating a new machine with the following costs and savings:

• Initial cost: $100,000
• Annual savings: $25,000
• Life of machine: 6 years
• Salvage value: $10,000

Requirements:

1. Compute the payback period for the machine.
2. Calculate the NPV assuming a discount rate of 10%.
3. Determine the IRR of the investment.
4. Should the company proceed with the purchase? Justify your answer based on the calculations.