Nucore Company is thinking of purchasing a new candy-wrapping machine at a cost of $\$ 370,000$. The machine should save the company approximately $\$ 70,000$ in operating costs per year over its estimated useful life of 10 years. The salvage value at the end of 10 years is expected to be $\$ 15,000$. (Ignore income tax effects.)

1. What is the machine's payback period?

2. Compute the net present value of the machine if the cost of capital is 12 percent.

3. What is the expected internal rate of return for this machine?