Exercise 12-15 (Algo) Internal Rate of Return and Net Present Value [LO12-2, LO12-3] Henrie's Drapery Service is invertigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost \$126,175, including freight and installation. Hentie's estimated the new machine would increase the company's cash infiows, net of expenses, by $35,000 per yeat. The machine would have a five-year useful life and no salvage value. Click here to view Exhibit 128-1 and Exhibit 128-2, 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, Le. 0.123 should be. considered as 12% ) 2. Using a discount rate of 12\%, what is the machine's net ptesent value? interpret your results. 3. Suppose the new machine would increase the company's annual cash inflows, net of expenses, by only $32,435 per year. Under these conditions, what is the internal rate of return? (Round your answer to the nearest whole percentoge, Le. 0.123 should be considered as 12\%.) Answer is complete but not entirely correct. Exercise 12-4 (Algo) Uncertain Future Cash Flows [LO12-4] Lukow Products is irtvestigating the purchase of a plece of automated equipment that will save $160,000 each year in direct labor and inventory carrying costs. This equipment costs $870,000 and is expected to have a 7 -year useful life with no salvage value. The company's requled rate of return is 9% on all equlpment purchases. Management anticipates that this equipment will provide intangible benefits such as greater flexibility and higher-quality output that will result in additional future cash inflows. Click here to view Exhibit 128.1 and Exhipin.128-2, to determine the appropriate discount factor(5) using table Required: 1. What is the net present value of the piece of equipment before considering its intanglbie benefits? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) 2. What minimum dollar value per year must be provided by the equipment's intangible benefits to justify the $870.000 investment? (Do not round Intermediate calculations. Round your answer to the nearest whole dollar amount.)