***Please use Excel***

The Magic Company is considering buying a new machine for one of its factories. The machine cost is $125,000, and its expected life span is 8 years. The machine will be depreciated on the straight-line basis to a salvage value of zero; nevertheless, the company anticipates that it can sell the machine at the end of year 8 for $12,000. The machine is expected to reduce the production costs by $35,000 annually. If the appropriate discount rate is 12% and the corporate tax is 40%:

a. Calculate the project's NPV.

b. Calculate the project's IRR.

***Please use Excel***