Bob Jensen Inc. purchased a $$440,000$ machine to manufacture specialty taps for electrical equipment. Jensen expects to sell all it can manufacture in the next $10$ years. To encourage capital investments, the government has exempted taxes on profits from new investments. This legislation is to be in effect for the foreseeable future. The machine is expected to have a $10-$year useful life with no salvage value. Jensen uses straight$-$line depreciation. Jensen uses a $10\%$ discount rate in evaluating capital investments, the investment is subject to taxes, and the projected pretax operating cash inflows are as follows:

Year Pretax Cash Inflow

$1$ $ $39,000$

$259,000$

$378,000$

$4145,000$

$5163,000$

$6192,000$

$7183,000$

$8157,000$

$977,000$

$1052,000$

Jensen has been paying $25\%$ for combined federal, state, and local income taxes, a rate that is not expected to change during the period of this investment. The firm uses MACRS depreciation. The asset qualifies as a $5-$year property. $($Use Exhibit $12\mathrm{.}4)$

Required:

Compute the following for the proposed investment:

$1.$ Its payback period $($in years$)$ under the assumption that the cash inflows occur evenly throughout the year. $($Do not round intermediate calculations. Round your final answer to $1$ decimal place.$)$

$2.$ Its accounting $($book$)$ rate of return based on $($a$)$ the initial investment, and $($b$)$ an average investment $($calculated here as a simple average of the $10$ average annual book values; for each year, the average book value is the sum of the beginning$-$of$-$year and end$-$of$-$year book value, divided by two; note: the average book value for each of the last four years is $$0).($Round your final answers to $1$ decimal place.$)$

$3.$ Its estimated net present value $($NPV$).$ Use the built$-$in NPV function in Excel. $($Round your final answer to nearest whole dollar amount.$)$

$4.$ Its internal rate of return $($IRR$).$ Use the built$-$in IRR function in Excel. $($Round your final answer to $1$ decimal place.$)$

$5.$ Its modified internal rate of return $($MIRR$).($Round your answer to $1$ decimal place.$)($In conjunction with this question, you might want to consult either of the following two references: MIRR Function and$/$or IRR in Excel.$)$