Exercise 14-3 (Algo) Internal Rate of Return [LO14-3] Wendell's Donut Shoppe is investigating the purchase of a new $42,700 donus-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $6.400 per year in addibon, the new machine would allow the compony to produce one new style of donut, resulting in the sale of 2,400 dozen more donuts each year. The company. reaizes a contributon margin of \$200 per dozen donuts sold. The new machine would have a six-year useful ife. Cick here to vew Exhibit fABd and Exhibit 14B-2. to determine the appropriate discount factor(5) using tables. Required: 1. What would be the total annual cash infiows associated whth the new machine for captal budgeting purposes? 2. What discount factor should be used to compute the new machine's intemal rate of retum? (Round your answers to 3 decimal ploces.) 3. What is the new machine's anternal rate of return? (Round your final answer to the nearest whole percentage.) 4 In addition to the data given previously, assume that the mochine will have a $12.840 salvage value at the end of six years. Under these condimons, what is the internal rate of teturn? (Hint: You moy find it heipful to use the net present value approach, find the discount rote that will couse the net present value to be closest to zero) (Round your final onswer to the nearest whole percentage.)