82) Westaus Instant Scaffolding desires to buy a new crane and accessories to help install and
remove scaffoldings at building sites. The machine sells for $150 000 and requires working
capital of $20 000. Its estimated useful life is six years and it will have a salvage value of
$35 120. Recovery of working capital will be $20 000 at the end of its useful life. Annual
cash savings from the purchase of the machine will be $40 000.
a. Calculate the net present value at a 14% required rate of return.
b. Calculate the internal rate of return.
c. Determine the payback period of the investment.