IBX Pty Ltd is considering the purchase of a new machine that is expected to save the company $81,000 at the end of each year in reduced wages. The machine costs $261,000, plus another $15,000 to be installed. It is expected to last for five years after which it can be sold as scrap for $47,000. Operating expenses (such as fuel and maintenance) are $7,000 pa.

a)Determine the annual net cash flows of this investment (ignore the effect of taxes). Enter the information in the following table. Indicate whether cash flows are + or -:

Time 0 1 2 3 4 5

Net Cash Flow ____________ _________ _______ ________ ________ ____________

b)Calculate the NPV if the required rate of return is 13% pa. Give your answer in dollars and cents to the nearest cent. NPV13% = $ _________

c)Calculate the NPV if the required rate of return is 15% pa. Give your answer in dollars and cents to the nearest cent. NPV15% = $__________