Ms. Sarah is considering the purchase of a new piece of equipment that has a net initial investment with a present value of 4,000,000. The equipment has an estimated useful life of 4 years. For tax purposes, the equipment will be fully depreciated at rates of 30%, 30%, 20% and 20%, in years one, two, three and four, respectively. The new machine is expected to have a 200,000 salvage value. The machine is expected to save the company 1,700,000 per year in operating expenses. Ms. Sarah has a 30% marginal income tax rate and a 12% cost of capital. Discount rates for a 12% rate are Year 1 Year 2. Year 3 Year 4 Present Value of an Ordinary Annuity of 1 0.893 1.690 2.402 3.037 1. What is the net present value of this project? 2. What is the profitability index for the project? 3. The payback period for this investment is? Present Value of 1 0.883 0.797 0.712 0.636