5. An entity is purchasing a machine that will cost $36,000, have a 6-year life, and have no salvage value. The company expects to sell the machine's output of 4,000 units evenly throughout each year. Total income over the life of the machine is estimated to be $12,000. The machine will generate net cash flows per year of $6,000. What is the average rate of return for the machine?

6. When using the net present value to evaluate competing capital investment proposals, an excess of the present value of future cash inflows over the amount invested indicates that the rate of return on the proposal is less than the rate used in the analysis. TRUE/FALSE