Project net cash flows () Machine A Machine B Year 0 (1,500,000) (2,200,000) Year 1 740,000 670,000 Year 2 570,000 700,000 Year 3 480,000 830,000 Year 4 420,000 900,000 Year 5 360,000 1,070,000 Crystalline Manufacturing Ltd uses the straight-line method of depreciation and its cost of capital (i.e. the discount rate) is 15%. It is assumed that Machine A will have a residual value of 30,000 at the end of the five years, while Machine B will have a residual value of 50,000 at the end of the five years. The company's policy for new investments is that the investment should pay itself back within three years. a. Calculate the payback period and net present value (NPV) of the proposed two machines. You are required to show all your workings to support your answers. (14 marks) b. Advise Mrs Khan on which machine the company should invest in based on your calculations in part (a) and provide a detailed explanation of your advice. (10 marks)