FUN-FOOD Ltd is a manufacturer of ready-made meals. In order to keep up with competition and decrease its costs, FUN-FOOD is considering the purchase of a highly specialised machine to replace its existing production line. Further information pertaining to the installation of this machine are as follows:

The machine will require an initial outlay of $443,000.

The machine is expected to be used for 10 years, after which FUN-FOOD intends to sell it for $75,000.

As a result of the installation of the machine, FUN-FOOD expects a significant reduction in running costs along with an increase in production capacity. Overall, FUN-FOOD expects the net cash flows to be $80,000 per year, every year for the 10 years of useful life.

Required (show all workings):