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The management of Niagra National Bank is considering an investment in automatic teller machines. The machines would cost $156,400 and have a useful life of seven years. The banks controller has estimated that the automatic teller machines will save the bank $34,000 after taxes during each year of their life (including the depreciation tax shield). The machines will have no salvage value.

Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)

1. Compute the payback period for the proposed investment. (Round your answer to 1 decimal place.)

2. Compute the net present value of the proposed investment assuming an after-tax hurdle rate of: (a) 10 percent, (b) 12 percent, and (c) 14 percent. (Negative amounts should be indicated by a minus sign.)