Allen Corporation's required rate of return is 14%. The company is considering the purchase of a new machine that will save $10,000 per year in cash operating costs. The machine will cost $39,540 and will have an 8-year useful life with zero salvage value. Straight-line depreciation will be used. Required: Compute the machine's internal rate of return. Would you recommend purchase of the machine? Explain.

Please provide original material and detail in the answer.