Barrett Boone, Farish Enterprises vice president of operations, needs to replace an automatic lathe on the production line. The model he is considering has a sales price of $261,272 and will last for 6 years. It will have no salvage value at the end of its useful life. Garrett estimates the new lathe will reduce raw materials scrap by $40,700 per year. He also believes the lathe will reduce energy costs by $25,250 per year. If he purchases the new lathe, he will be able to sell the old lathe for $4,812.

Calculate the internal rate of return