Bob Jensen Incorporated purchased a $650,000 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: 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 straight-line depreciation. Assume, for simplicity, that MACRS depreciation rules do not apply. \begin{tabular}{|c|l|l|l|} \hline 1. & Unadjusted payback period & & years \\ \hline 2a. & ARR based on initial investment & % \\ \hline 2b. & ARR based on average investment & % \\ \hline 3. & NPV & & \\ \hline 4. & Present value payback period & years \\ \hline 5. & Internal rate of return (IRR) & % \\ \hline 6. & Modified internal rate of return (MIRR) & % \\ \hline \end{tabular}