Problem 1Required: In the space below describe the net present value method of c

Problem 1Required: In the space below describe the net present value method of capital budgeting.(10 points)Problem 2Required: Compute the average annual cash inflows. (20 points)Compute the payback period using the accumulation method. (20 points)(40 points total)20132014201520162017Incremental revenue 6000 2000 4000 2000 1000Cost of new machine 12000