BSU Inc. wants to purchase a new machine for $39,900, excluding $1,100 of installation costs. The old machine was bought five years ago and had an expected economic life of 10 years without salvage value. This old machine now has a book value of $1,800, and BSU Inc. expects to sell it for that amount. The new machine would decrease operating costs by $9,000 each year of its economic life. The straight-line depreciation method would be used for the new machine, for a six-year period with no salvage value. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Determine the cash payback period. (Round cash payback period to 1 decimal place, e.g. 10.5.)

Cash payback period in years:

Determine the approximate internal rate of return: (Round answer to 0 decimal places, e.g. 10.)

Internal rate of return % assuming the company has a required rate of return of 9%, determine whether the new machine should be purchased?