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Question 1 Oppo Industries is considering the purchase of a new strapping machine, which will cost RM150,000, plus an additional RM10,500 to ship and install. The new machine will have a 5- year useful life and will be depreciated to zero using the straight-line method. The machine is expected to generate new sales of RM45,000 per year and is expected to save RM16,000 in labor and electrical expenses over the next 5-years. The machine is expected to have a salvage value of RM20,000. The new machine requires inventories increase by RM40,000 and accounts payable increase by RM10,000. The change in Net Operating Working Capital is expected to be fully recovered at year 5. Oppo's income tax rate is 35%. Oppo uses a 12% discount rate for capital budgeting purposes. Required: a) Calculate the net present value if Oppo decided to buy the new machine. (10 Marks) b) Should the firm buy the new machine? Discuss. (2 Marks) (Total: 12 Marks)