6. Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $171,650. Henrie's has estimated the new machine would increase the company's cash inflow by $50,000 per year. The machine would have five-year useful life and no salvage value. What is the machine's internal rate of return? Use the following information to answer questions 7 - 8: Haws Company is considering investing in a new piece of equipment that will cost $200,000 and last for ten years. After purchase, the equipment will generate a net operating income of $30,000 per year and the depreciation expense is $20,000 per year. 7. What is the payback period? 8. What is the simple rate of return? 9. Blinko Products is considering leasing an airplane for use by its sales staff. If the airplane is leased, the company would make an immediate deposit of $40,000 to cover any damage during use. The lease would run for five years, at the end of which time the deposit would be refunded. The lease would require an annual payment of $100,000 (the first payment is due at the end of Year 1). At the end of the five-year period, the plane would revert back to the manufacturer. Blinko uses a discount rate of 10%. What is the net present value of leasing the airplane? 10. Under the indirect method of preparing a statement of cash flows, which of the following would be added to net income to determine cash flows from operating activities? a. Gain on sale of equipment. b. Increase in prepaid expenses. c. Increase in accounts payable, d. All of the above. e. None of the above