Project 2 Baze plans to replace an existing machine and must choose between two machines. Machine 1 has an initial cost of $200,000 and will have a scrap value of $25,000 after four years. Machine 2 has an initial cost of $225,000 and will have a scrap value of $50,000 after three years. Annual maintenance costs of the two machines are as follows: 1 2 3 4 Year Machine1($/year ) Machine2($/year ) 25,000 29,000 32,000 35,000 15,000 20,000 25,000 Where relevant, all information relating to Project 2 has already been adjusted to include expected future inflation. Taxation and tax-allowable depreciation must be ignored in relation to Machine 1 and 2 other information. Baze has a nominal before-tax weighted average cost of capital of 12% and a nominal after-tax weighted average cost of capital of 7%. Required: Calculate the net present value of Project 1 and comment on whether this project is financially acceptable to Baze University