Robert purchased a new copy machine for his business. The copy machine was purchased for $12,500 and is expected to generate the following cash flows for the next four years:

Year 1: $3,000, Year 2: 5,000, Year 3: 3,600, Year 4: 2,500.

Assume the copy machine can be sold for $1800 at the end of year 4. Robert's required rate of return is 6%.

What is net present value?

What is the internal rate of return?

Should the machine be purchased?