The Green Goddess Company is considering the purchase of a new machine that would increase the speed of manufacturing tires and save money. The net cost of the new machine is $45,000. The annual cash flows have the following projections.

Year

Cash flow

1

$15,000

2

20,000

3

25,000

4

10,000

5

5,000

a)If the cost of capital is 10 percent, what is the NPV?

1. b)What is the IRR?
2. c)Should the project be accepted? Why?