Regardless of the loan structure, the bank may include a compensating balance requirement in the loan agreement that reduces the usable loan proceeds. Trade credit is a form of loan from a bank to the selling firm to compensate for outstanding receivables. Firms should monitor accounts payable to make sure that they are making the payments at earliest possible time. Your buddy in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture exist90. However, once built, the machine will last for 20 years and will require no maintenance. The machine takes one year to build and it will cost exist1,000 to build. Your buddy warts to know if he should invest the money to construct it. If the interest rate is 6% per year, what should your buddy do? A. To make the decision you need to calculate the net present value (NPV) of the machine. The NPV of the machine is exist (round to the nearest dollar if regally use -) b. You convince your friend to improve the machine so that the amount of produced money will increases every year by 2% over the 20 years. The NPV of the new machine is exist (round to the nearest dollar if regally use -) c. What is the IRR of the machine in b.? The IRR of the machine is %. (round to two decimals)