Elmsford Industries had the opportunity to invest $90,000 in a new packaging machine that should provide annual cash operating inflows of $29,000 for six years. At the end of that period it can be sold for $10,000. Elmsfords required rate of return is 14%.

Required:

a. What is the machines net present value?

b. Based on the NPV you have calculated in (a) above, should the management of Elmsford invest in the new machine?

c. What other qualitative information should be considered in marking this decision?