ces Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $137,320, including freight and installation. Henrie's estimated the new machine would increase the company's cash inflows, net of expenses, by $40,000 per year. The machine would have a five-year useful life and no salvage value. Click here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor(s) using table. Required: 1. What is the machine's internal rate of return? (Round your answer to the nearest whole percentage, i.e. 0.123 should be considered as 12%.) 2. Using a discount rate of 14%, what is the machine's net present value? Interpret your results. 3. Suppose the new machine would increase the company's annual cash inflows, net of expenses, by only $37,150 per year. Under these conditions, what is the internal rate of return? (Round your answer to the nearest whole percentage, i.e. 0.123 should be considered as 12%) 1. Internal rate of return 2. Net present value % 3. Intemal rate of return % EXHIBIT 14B-1 Present Value of S1; 1 (1+r)^ Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 17% 16% 18% 19% 20% 21% 22% 23% 24% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.862 0.855 2 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 3 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 4 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 5 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 6 0.790 0.746 0.705 0.666 0.630 0.596 0.535 0.564 7 0.760 0.711 0.665 0.623 0.583 0.547 0513 0.482 0.452 0.712 0.693 0.636 0.613 0.592 0.543 0.519 0.567 0.507 0.480 0.456 0.400 0.675 8 0.731 0.677 0627 0.582 0.540 0.502 0.467 0.434 9 0.703 0.645 0.592 10 0.676 0.614 0,558 0.544 0.508 0.463 0.500 0.460 0.424 0.391 0.361 0422 0.386 0352 0322 11 0.650 0.585 0.527 0475 0.429 0.388 0.350 0.287 12 0.625 0357 0.497 0.444 0.397 0.356 0.319 13 0.601 0.530 0.469 0.415 0.368 0.326 0.290 14 0.377 0.505 0.442 0.388 0.340 0.299 0.263 0.232 15 0.555 0.481 0.417 0.362 0.315 17 16 0.534 0.458 0.394 0.339 0.371 0313 0436 0317 18 0.494 0.416 0.350 0.270 0.250 0.275 0.292 0.252 0.218 0.231 0.239 0.209 0.108 0.093 0.870 0.756 0.743 0.731 0.658 0.641 0.624 0.552 0.534 0.572 0.456 0.497 0476 0.410 0.390 0.432 0.354 0.376 0.333 0.425 0.285 0305 0.327 0404 0.376 0.351 0.243 0.225 0.209 0.194 0.180 0.167 0.333 0.284 0.263 0.308 0.191 0.247 0.208 0.176 0.227 0.162 0.149 0.137 0.295 | 0.270 0.215 0.195 0.178 0.162 0.148 0.135 0.123 0.112 0.317 0.261 0.237 0.102 0.112 0.152 0.137 0.124 0.092 0.208 0.187 0.168 0.231 0.286 0.257 0.145 0.130 0.163 0.116 0.104 0.093 0.204 0.182 0.084 0.258 0.229 0.088 0.125 0.111 0.099 0.078 0.069 0.062 0.055 0.04 0.181 0160 0.141 0.205 0.074 0.065 0.057 0.095 0.140 0.123 0.084 0.160 0.183 0.062 0.054 0.188 0.163 0.141 0.123 0.107 0.847 0.840 0.833 0.826 0.820 0.813 0.80 0.718 0.706 0.694 0.683 0.672 0.661 0.65 0.609 0.593 0.579 0.564 0.551 0.537 0.52 0.499 0.516 0.482 0.467 0.451 0437 0.42 0.437 0419 0.402 0.386 0.370 0.355 0.34 0.370 0.352 0.335 0.319 0.303 0.289 0.27 0.314 0.296 0.279 0.263 0.235 0.249 0.22 0.266 0.249 0.233 0.218 0.204 0.191 0.17 0.155 0.14 0.126 0.110 0.103 0.09 0.083 0.07 0.075 0.068 0.06 0.051 0.045 0.04 0.071 0.081 0.047 0.042 0.036 0.03 0.198 0.170 0.146. 0.125 0.108 0.093 0.080 0.069 0.060 0.052 0.039 0.034 0.045 0.030 0.02 0.212 0.296 0.180 0.153 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 19 0475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 20 0456 0377 0.312 0.258 0.215 0.178 0.149 0.124 0.104 0.087 0.051 0.073 0.061 0.043 0.037 0.031 0.038 0.031 0.026 0.032 0.028 0.024 0.02 21 0.439 0.359 0.294 0.242 0.199 0.164 0.135 0.112 0.093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 22 0.422 0.342 0.278 0226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.038 0.032 0.018 0.015 0.022 0.018 0.026 0.01 0.027 0.025 0.020 0.022 0.019 0.016 0.01 0.015 0.013 0.01 0.013 0.011 0.00- EXHIBIT 14B-2 Present Value of an Annuity of $1 in Arrears; (1+r)" Periods 4% 1 0.962 5% 0.952 0.943 6% 7% 8% 9% 10% 11% 0.935 0.926) 2 1.886 1.859 1.833 1.808 1.783 0.917 0.909 0.901 1.759 1.736 1.713 3 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 4 3.630 3.546 3.465 3.387 3.312 3.240 3.1703.102 3.037 5 4.452 4.329 4.212 4.100 3.993 3.890 6 5.242 5.076 4917 4.767 4.623 3.998 3.889 3.784 7 6.002 5.786 5.582 5.389 5.206 4.288 4.160 8 6.733 6463 6.210 4.799 4.639 4.487 9 7.435 7.10% 6.802 6.515 6.247 5.995 4.946 4.772 10 8.111 7.722 7.360 7.024 6.710 6.418 11 8.760 8.306 7.887 7.499 7.139 6.805 12 9.385 8.863 8.384 7.943 7.536 7.161 13 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6,750 6.424 6.122 14 10.563 9.899 9.295 8.745 8.244 7.786 7,367 6.982 6.628 6.302 6.002 15 11.118 10.380 9.712 9.108 8.061 8.559 7.606 7.191 6.811 6.462 6.142 5.847 16 11.652 10.838 10.106 9447 8.851 8.313 7.824 7.379 6.974 6.604 6.265 17 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.549 7.120 6.729 6.373 18 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.702 19 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.839 201 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.963 21 14 029 12.821 11.764 10.836 10.017 9.292 8.649 22 14.451 13.163 12.042 11.061 10.201 9.442 8.772 7.562 7.102 8.075 8.176 7.645 7.470 6.687 6.743 12% 15% 13% 14% 0.877 0.870 0.893 0.885 1.647 1.668 1.626 1.690 2.402 2.322 2.361 2.283 2.974 2.914 2.855 3.352 3.791 3.696 3.605 3.517 3.433 4.355 4.231 4.111 4.486 5.033 4.868 4.712 4.564 4.423 4.968 5.335 5.146 5.971 5,747 5.535 5.759 5.537 5.328 5.132 5.889 5.650 5.426 5.216 5.019 4.659 4.494 6.145 4,836 4.656 6.495 6.207 5.938 5.687 5.453 5.234 5.029 6.194 5.918 5.660 5.421 5.197 4.988 4.793 4.611 6.814 6.492 5.842 5.583 5.342 5.118 5.468 5.229 5.008 5.092 5.575 5.324 4.876 5.954 5.668 5.405 5.162 4.938 6.047 5.749 5.475 5.222 7.250 6.840 6.467 5.273 6.128 5.818 5.534 5.033 4.812 4.608 4.419 4.243 7.366 6.938 6.550 6.198 5.877 5.584 5.316 5.070 4.843 4.635 4.442 4.263 7.469 7.025 6.623 6.259 5.929 5.628 5.353 5.101 4.870 4.657 4.460 6.312 5.973 5.665 5.384 5.127 4.891 4.675 4.476 5.696 5.410 5.149 4.909 4.690 4.488 16% 17% 18% 19% 3.685 4.039 20% 21% 0.840 0.833 0.826 0.855 0.847 0.862 1.528 1.547 1.509 1.605 1.585 1.566 2.246 2.210 2.174 2.140 2.106 2.074 2.042 2.494 2.448 2.589 2.540 2.743 2.690 2.639 2.798 3.274 3.199 3.127 3.058 2.991 3.589 3,410 3.498 3.922 3.812 3,706 22% 23% 0.820 | 0.813 1.492 1.474 2.011 2.926 2.864 2.803 3.326 3.245 3.167 3.092 3.605 3.508 3.416 3.327 4.344 4.207 4.078 3.954 3.837 3.726 3.619 3.518 4.607 4.451 4.303 4.163 3.905 4.031 3.786 3.673 4.833 4.339 4.192 4.054 3.923 3,799 4.486 4.327 4.035 4.177 3.902 4.439 4.278 4.127 3.985 4.910 4.715 4.533 4.362 4.203 4.053 5.724 4.802 4.611 4,432 4.265 4.108 4.675 4.489 4.315 4.153 4.730 4.536 4.357 4.189 4.990 4.775 4.576 4.391 4.219 4.279 4.292 6.359 6.011 4.302