Odessa Co$.$ is considering the purchase of a new machine for use in its production process.

The following information has been collected.

Cash Flow

Equipment cost $ $(900,000)$

Annual Total Pre$-$ Tax Cash

Inflows:

Year $1$ $ $284,000$

Year $2$ $ $252,000$

Year $3$ $ $220,000$

Year $4$ $ $160,000$

Year $5$ $ $117,000$

a$.$ Calculate the payback for the machine using the information above $($round answer to two decimals$).$

b$.$ The new machine is expected to have a $5-$year useful life with a terminal disposal value of zero. The

firm uses the straight$-$line depreciation. The salvage value is expected to be zero at the end of the

machine$$s useful life. Topeka uses an $8\%$ required rate of return on investments and pays taxes at a

$20\%$ tax rate. Calculate the Net Present Value $($NPV$)$ of the machine $($round answer to dollars$).$