The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $60,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Year	Cash Flow
1	$	27,000
2		28,000
3		31,000
4		19,000
5		12,000

a. If the cost of capital is 12 percent, what is the net present value of selecting a new machine?

b. What is the internal rate of return?

c. Should the project be accepted?