Show all computations Capital Budgeting and Investment Analysis Celina K Company is planning to buy a new machine at a cost of $200,000. The machine is expected to last for 10 years and have no salvage value at the end of its useful life. Straight-line depreciation will be used. The company expects to save 10,000 hours of direct labor each year because of the new machine, as well as $4,000 each year in other operating costs. Management's best estimate is that on average the hourly rate for the labor saved will be $5.50. With the exception of the initial purchase, assume all cash flows take place at the end of the year, and a tax rate of 40%. Required 1. Calculate the payback period on the investment in new machinery. 2 Calculate the rate of return on the average investment Calculate the net present value of the investment and profitability index: 3. (a) Ignoring income taxes, using a discount rate of 10%. (Use the appropriate PV table in the textbook) (b) Including the effect of taxes, using a 10% discount rate. (use the appropriate PV table in the textbook)