Randel Company is evaluating purchasing new equipment that has the following predicted cash flows:

Initial investment	$45,110
Operation
Year 1	20,640
Year 2	30,000
Year 3	10,000
Salvage value	0

The present value factors of $1 for different rates of return are as follows:

Present Value of $1
Period	12%	14%	16%	18%
1	0.89286	0.87719	0.86207	0.84746
2	0.79719	0.76947	0.74316	0.71818
3	0.71178	0.67497	0.64066	0.60863
4	0.63552	0.59208	0.55229	0.51579

Required:

a. Given a discount rate of 14 percent, determine the net present value of the investment proposal.

b. Would the company want to purchase the new machine? Why?