DeLuxe Furniture is thinking of buying a wood cutting machine for $90,000 that would save it $35,000 per year in production costs. The savings would be constant over the project's 3-year life. The machine is to be linearly depreciated to zero and will have no resale value after 3 years.

The machine would require annual maintenance costs of $3,000 and an immediate additional $1,000 in net working capital that would remain fixed until the end of the project. The appropriate cost of capital for this project is 14% and the company's tax rate is 34%.

1: What is the NPV of the costs associated with this new machine (entered as a positive cost)?

2: What is the EAC of this new machine?