Elsies Limited is considering the purchase of a machine to manufacture some of the spare parts for the catering

equipment during $2025.$ The company desires a minimum required rate of return of $12\%.$ The machine will cost

R$2000000$ plus R$400000$ for installation and is predicted to have a useful life of five years. A salvage value of

R$100000$ is estimated. The machine is expected to generate cash inflows of R$800000$ per year but will require the

employment of two new machine operators at R$100000$ per year for each operator, and it will require maintenance and

repairs averaging R$40000$ per year. Depreciation will be calculated using the straight$-$line method.