Use NPV to analyze the decision to purchase the new machine.

A) Identify and label each inflows/outflow, don't just present a single inflow/outflow number for each year.

B) Assuming a discount rate of 12%

C) Do not include financing costs (loan interest and principal repayments) they are incorporated into the discount rate. Assume an initial investment (cash outflow) equal to the cost of the new machine.