Wood Products Company would like to purchase a computerized wood lathe for $80,000. The machine is expected to have a life of 4 years, and a salvage value of $5,000. Annual maintenance costs will total $20,000. Annual savings resulting from the purchase of this machine are expected to be $45,000. The company's required rate of return is 12%.

1. Find the net present value (NPV) of this investment.

2. Should the company purchase the wood lathe. Why or Why not?