MNO Ltd. is considering investing in one of three machines to improve production. The financials are outlined below. Assume a corporate tax rate of 27% and a capital interest rate of 7%.

Particulars	Machine 1 (Rs)	Machine 2 (Rs)	Machine 3 (Rs)
Initial Investment	9,00,000	10,00,000	11,00,000
Estimated Annual Sales	12,00,000	13,00,000	14,00,000
Cost of Production:
Direct Material	1,10,000	1,20,000	1,30,000
Direct Labour	1,20,000	1,30,000	1,40,000
Factory Overhead	1,40,000	1,50,000	1,60,000
Administration Cost	55,000	60,000	65,000
Selling & Distribution Cost	45,000	50,000	55,000

The economic life of Machine 1 is 8 years, while it is 9 years for the other two. The scrap values are Rs. 1,00,000, Rs. 1,10,000, and Rs. 1,20,000 respectively. Using the payback period method, identify which machine should be purchased.