1.(Ignore income taxes in this problem.) Crockin Corporation is considering a machine that will save $5,000 a year in cash operating costs each year for the next six years. At the end of six years it would have no salvage value. If this machine costs $25,380 now, the machine's internal rate of return is closest to:

Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables.

3%

4%

5%

6%

2.

(Ignore income taxes in this problem.) The following data pertain to an investment project: Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables.

Investment required	$	35,384
Annual savings	$	8,000
Life of the project		7	years

The internal rate of return is closest to:

11%

12%

13%

14%