Garrett boone needs to replace an automatic lathe on production. The model he is considering has a sales price of $395,900 and will last for 12 years. It will have no salvage value. Garret estimates that the new lathe will reduce raw materials scrap by $42,500 per year. He also believes it will reduce energy costs by $23,500 per year If he purchases the new lathe he will be able to sell the old one for $5,338

A. Calculate the lathe's internal rate of return

B. If the enterprises uses a 10% hurdle rate should Garrett purchase the lathe ?