Topeka Co. is considering the purchase of a new machine for use in its production process. The following information has been collected.

A) Calculate the payback for the machine using the information above (round answer to two decimals).

B) The new machine is expected to have a 5-year useful life with a terminal disposal value of zero. The firm uses the straight-line depreciation. The salvage value is expected to be zero at the end of the machines useful life. Topeka uses an 8% required rate of return on investments and pays taxes at a 20% tax rate. Calculate the Net Present Value (NPV) of the machine (round answer to dollars).

\begin{tabular}{|l|c|} \hline & Cash Flow \\ \hline Equipment cost & $(900,000) \\ \hline AnnualTotalPre-TaxCashInflows: & \\ \hline Year 1 & $284,000 \\ \hline Year 2 & $252,000 \\ \hline Year 3 & $220,000 \\ \hline Year 4 & $160,000 \\ \hline Year 5 & $117,000 \\ \hline \end{tabular}