Henries Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $137,280, including freight and installation. Henries has estimated that the new machine would increase the companys cash inflows, net of expenses, by $40,000 per year. The machine would have a five-year useful life and no salvage value.

(Hint: Use Microsoft Excel to calculate the discount factor(s).)

(Do not round intermediate calculations and round your final answers to the nearest dollar amount.)

1. what is the machines internal rate of return.

2. what is the machines net present value. Use a discount rate of 14%.

3. Suppose that the new machine would increase the companys annual cash inflows, net of expenses, by only $37,150 per year. Under these conditions, compute the internal rate of return to the nearest whole percent.