1. Gordon Corporation is considering the acquisition of a new machine that costs $149,040. The machine is expected to have a four-year service life and will produce annual savings in cash operating costs of $45,000. Gordon evaluates investments by using the internal rate of return and ignores income taxes. Compute the machine's internal rate of return. Give your answer in decimal form. Hint: be sure you give the interest rate not the factor.

2.

If an investment with a hurdle rate of 8% has an NPV of $3,000, select ALL answers that would be correct:

		The IRR is 8%
		The IRR is less than 8%
		The IRR is more than 8%
		The investment will earn $3,000 profit
		The investment will earn $3,000 MORE than required
		The investment will have a $3,000 loss
		The present value of cash outflows was $3,000 more than the present value of cash inflows.
		The present value of cash inflows was $3,000 more than the present value of cash outflows.