Exercise 12-3 Internal Rate of Return [L012-3 Wendell's Donut Shoppe is investigating the purchase of a new $52.000 donut-making machine. The new company to reduce the amount of part-time allow the company to produce one new style of donut, resulting in the sale of 1,800 dozen more donuts each year The company realizes a contribution margin of $2 50 per dozen donuts sold. The new machine would have a sixcyear useful life. help needed. at a cost savings of $6,900 per year In addition, the new machine would Click here to view Exhibit 12B-1 and Exhibit 128-2, to determine the appropriate discount factorts) using tables Required: 1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes? 2 What discount factor should be used to compute the new machine's internal rate of return? (Round your answer to 3 declmal 3. What is the new machine's internal rate of return? (Round inal answey to neorest whole percentage j 4. In addition to the data given previously, assume that the machine will have a $16.835 saivage value at the end of six years es what is the internal rate of return? (Hint You may find it heipful to use the net present value approach, find the discount rate that will cause the net present value to be closest to zero) Round your fnel answer to neareset whole perc 11.400 1. Annual cash inflows 2. Discount factor 3. Internal rate of return 4 Internal rate of return