Herky Foods is considering acquisition of a new wrapping machine. The initial investment is estimated at $1.25 million, and the machine will have a 5-year life with no salvage value. The expected cash flow are shown in the following:

Year Cash Flow

1 400,000

2 375,000

3 300,000

4 350,000

5 200,000

Using a 6% discount rate, determine the:

a. NPV

b. IRR

c. PI

d. Should Herky make this investment?