1 Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $137,320, including freight and installation. Henrie's estimated the new machine would increase the company's cash inflows, net of expenses, by $40,000 per year. The machine would have a five-year useful life and no salvage value. Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using table. 00:52:43 Required: 1. What is the machine's internal rate of return? Note: Round your answer to the nearest whole percentage, i.e. 0.123 should be considered as 12%. 2. Using a discount rate of 14%, 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 $38,090 per year. Under these conditions, what is the internal rate of return? Note: Round your answer to the nearest whole percentage, i.e. 0.123 should be considered as 12%. 1. Internal rate of return 2. Net present value 3. Internal rate of return 14 % 0 12 %

Henile's Dropery Service is investigating the purchase of a new machine for cieaning and blocking drapes. The machine would cost $137,320, including freight and installation. Henrie's estimated the new machine would increase the company's cash infiows, net of expenses, by $40,000 per-year. The machine would have a flveyear usefur life and no salvage value. Click here to view Exhibit 78 , 1 and Exhipit 782, to determine the appropriate discount foctor(s) using table. Required: 1. What is the mochine's internal rate of return? Note: Round your answer to the nearest whole percentage, L.e, 0.123 should be considered as 12%. 2. Using a discount rate of 14%, 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 $38,090 per year. Under these conditions, what is the internal rate of return? Note: Round your answer to the nearest whole percentage, l.e, 0.123 should be considered as 12%