Yummy Candy Company is considering purchasing a second chocolate dipping machine in order to expand their business. The information Yummy has accumulated regarding the new machine is:

Cost of the machine	$120,000
Life of the machine	5 years
Required rate of return	6%
Increased annual contribution margin
Year 1	20,000
Year 2	30,000
Year 3	40.000
Year 4	45,000
Year 5	50,000

Yummy estimates they will be able to produce more candy using the second machine and thus increase their annual contribution margin. They also estimate there will be a small disposal value of the machine but the cost of removal will offset that value. Ignore income tax issues in your answers. Assume all cash flows occur at year-end except for initial investment amounts.

Required:

Calculate the following for the new machine:

1. Net present value
2. Payback period
3. Discounted payback period
4. Internal rate of return (using the interpolation method)