(Ignore income taxes in this problem.) The Valentine Company has decided to buy a machine costing $51,506. Estimated cash savings from using the new machine amount to $9,100 per year. The machine will have no salvage value at the end of its useful life of twelve years.

Click here to view Exhibit 8B-2 to determine the appropriate discount factor(s) using tables.

If Valentine's required rate of return is 8%, the machine's internal rate of return is closest to: