Exercise $12-15($Algo$)$ Internal Rate of Return and Net Present Value $[$LO$12-2,$ LO$12-3]$

Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost

$$105,510,$ including freight and installation. Henrie's estimated the new machine would increase the company's cash inflows, net of

expenses, by $$30,000$ per year. The machine would have a five$-$year useful life and no salvage value.

Click here to view Exhibit $12$B$-1$ and Exhibit $12$B$-2,$ to determine the appropriate discount factor$($s$)$ using table.

Required:

What is the machine's internal rate of return? $($Round your answer to the nearest whole percentage, i$.$e$.0\mathrm{.}123$ should be

considered as $12\%.)$

Using a discount rate of $13\%,$ what is the machine's net present value? Interpret your results.

Suppose the new machine would increase the company's annual cash inflows, net of expenses, by only $$25,735$ per year. Under

these conditions, what is the internal rate of return? $($Round your answer to the nearest whole percentage, i$.$e$.0\mathrm{.}123$ should be

considered as $12\%.)$