Services Inc. would like to purchase a blueprint machine for \($50,000.\) The machine is expected to have a life of four years, and a salvage value of \($10,000.\) Annual maintenance costs will total \($14,000.\) Annual savings are predicted to be \($30,000.\) The company’s required rate of return is 11 percent (data are the same as in the previous exercise).

Required

a. Use trial and error to approximate the internal rate of return for this investment proposal. Round to the nearest dollar.

b. Should the company purchase the blueprint machine? Explain.