XYZ Machine Tool Company is considering the acquisition of a new metal-cutting machine. The required initial investment is expected to be $75,000 and the projected cash benefits over a three-year project life are as follows: End of Year Net Cash Flow Year 0: -$75,000 Year 1: $24,400

Year 2: $27,340

Year 3: $55,760

You have been asked by the president of the company to evaluate the economic merit of the acquisition. The firms MARR is known to be 15%.