Henrie’s drapery service is investigating the purchase of a new machine for cleaning and blocking drapes. the machine would cost $113,730, including freight and installation. henrie’s estimated the new machine would increase the company’s cash inflows, net of expenses, by $30,000 per year. the machine would have a five-year useful life and no salvage value.

use exhibit 13b-1 and exhibit 13b-2, to determine the appropriate discount factor(s) using table.

required:

1. what is the machine’s internal rate of return? (round your answer to whole decimal place i. e. 0.123 should be considered as 12%.)

2. using a discount rate of 10%, what is the machine’s net present value? interpret your results.

3. suppose the new machine would increase the company’s annual cash inflows, net of expenses, by only $27,000 per year. under these conditions, what is the internal rate of return? (round your answer to whole decimal place i. e. 0.123 should be considered as 12%.)