Exercise 24-6 BSU Inc. wants to purchase a new machine for $41,100, excluding $1,500 of installation costs. The old machine was bought five years ago and had an expected economic life of 10 years without salvage value. This old machine now has a book value of $2,300, and BSU Inc. expects to sell it for that amount. The new machine would decrease operating costs by $9,800 each year of its economic life. The straight-line depreciation method would be used for the new machine, for a six-year period with no salvage value. Click here to view PV table. (a) Determine the cash payback period. (Round cash payback period to 1 decimal place, e.g. 10.5.) Cash payback period years (

b) Determine the approximate internal rate of return. (Round answer to 0 decimal places, e.g. 10. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return %

(c) Assuming the company has a required rate of return of 10%, determine whether the new machine should be purchased. The investment shouldshould not be accepted.

Table3Present Value of 1
(n)	4%	5%	6%	7%	8%	9%	10%	11%	12%	15%
Periods
1	0.96154	0.95238	0.9434	0.93458	0.92593	0.91743	0.90909	0.9009	0.89286	0.86957
2	0.92456	0.90703	0.89	0.87344	0.85734	0.84168	0.82645	0.81162	0.79719	0.75614
3	0.889	0.86384	0.83962	0.8163	0.79383	0.77218	0.75132	0.73119	0.71178	0.65752
4	0.8548	0.8227	0.79209	0.7629	0.73503	0.70843	0.68301	0.65873	0.63552	0.57175
5	0.82193	0.78353	0.74726	0.71299	0.68058	0.64993	0.62092	0.59345	0.56743	0.49718
6	0.79031	0.74622	0.70496	0.66634	0.63017	0.59627	0.56447	0.53464	0.50663	0.43233
7	0.75992	0.71068	0.66506	0.62275	0.58349	0.54703	0.51316	0.48166	0.45235	0.37594
8	0.73069	0.67684	0.62741	0.58201	0.54027	0.50187	0.46651	0.43393	0.40388	0.3269
9	0.70259	0.64461	0.5919	0.54393	0.50025	0.46043	0.4241	0.39092	0.36061	0.28426
10	0.67556	0.61391	0.55839	0.50835	0.46319	0.42241	0.38554	0.35218	0.32197	0.24719
11	0.64958	0.58468	0.52679	0.47509	0.42888	0.38753	0.35049	0.31728	0.28748	0.21494
12	0.6246	0.55684	0.49697	0.44401	0.39711	0.35554	0.31863	0.28584	0.25668	0.18691
13	0.60057	0.53032	0.46884	0.41496	0.3677	0.32618	0.28966	0.25751	0.22917	0.16253
14	0.57748	0.50507	0.4423	0.38782	0.34046	0.29925	0.26333	0.23199	0.20462	0.14133
15	0.55526	0.48102	0.41727	0.36245	0.31524	0.27454	0.23939	0.209	0.1827	0.12289
16	0.53391	0.45811	0.39365	0.33873	0.29189	0.25187	0.21763	0.18829	0.16312	0.10687
17	0.51337	0.4363	0.37136	0.31657	0.27027	0.23107	0.19785	0.16963	0.14564	0.09293
18	0.49363	0.41552	0.35034	0.29586	0.25025	0.21199	0.17986	0.15282	0.13004	0.08081
19	0.47464	0.39573	0.33051	0.27615	0.23171	0.19449	0.16351	0.13768	0.11611	0.07027
20	0.45639	0.37689	0.3118	0.25842	0.21455	0.17843	0.14864	0.12403	0.10367	0.0611
Table4Present Value of an Annuity of 1
(n)	4%	5%	6%	7%	8%	9%	10%	11%	12%	15%
Payments
1	.96154	.95238	.94340	.93458	.92593	.91743	.90909	.90090	.89286	.86957
2	1.88609	1.85941	1.83339	1.80802	1.78326	1.75911	1.73554	1.71252	1.69005	1.62571
3	2.77509	2.72325	2.67301	2.62432	2.5771	2.5313	2.48685	2.44371	2.40183	2.28323
4	3.62990	3.54595	3.46511	3.38721	3.31213	3.23972	3.16986	3.10245	3.03735	2.85498
5	4.45182	4.32948	4.21236	4.10020	3.99271	3.88965	3.79079	3.6959	3.60478	3.35216
6	5.24214	5.07569	4.91732	4.76654	4.62288	4.48592	4.35526	4.23054	4.11141	3.78448
7	6.00205	5.78637	5.58238	5.38929	5.20637	5.03295	4.86842	4.7122	4.56376	4.16042
8	6.73274	6.46321	6.20979	5.97130	5.74664	5.53482	5.33493	5.14612	4.96764	4.48732
9	7.43533	7.10782	6.80169	6.51523	6.24689	5.99525	5.75902	5.53705	5.32825	4.77158
10	8.11090	7.72173	7.36009	7.02358	6.71008	6.41766	6.14457	5.88923	5.65022	5.01877
11	8.76048	8.30641	7.88687	7.49867	7.13896	6.80519	6.49506	6.20652	5.9377	5.23371
12	9.38507	8.86325	8.38384	7.94269	7.53608	7.16073	6.81369	6.49236	6.19437	5.42062
13	9.98565	9.39357	8.85268	8.35765	7.90378	7.4869	7.10336	6.74987	6.42355	5.58315
14	10.56312	9.89864	9.29498	8.74547	8.24424	7.78615	7.36669	6.98187	6.62817	5.72448
15	11.11839	10.37966	9.71225	9.10791	8.55948	8.06069	7.60608	7.19087	6.81086	5.84737
16	11.6523	10.83777	10.1059	9.44665	8.85137	8.31256	7.82371	7.37916	6.97399	5.95424
17	12.16567	11.27407	10.47726	9.76322	9.12164	8.54363	8.02155	7.54879	7.11963	6.04716
18	12.6593	11.68959	10.8276	10.05909	9.37189	8.75563	8.20141	7.70162	7.24967	6.12797
19	13.13394	12.08532	11.15812	10.3356	9.6036	8.95012	8.36492	7.83929	7.36578	6.19823
20	13.59033	12.46221	11.46992	10.59401	9.81815	9.12855	8.51356	7.96333	7.46944	6.25933