Internal Rate of Return Analysis. Heston Farming Company would like to purchase a harvesting machine for $100,000. The machine is expected to have a life of 4 years and a salvage value of $20,000. Annual maintenance costs will total $28,000. Annual savings are predicted to be $60,000. The company's required rate of return is 11 percent (these are the same data as the previous exercise). Required: a. Use trial and error to approximate the internal rate of return for this investment proposal. b. Should the company purchase the harvesting machine? Explain. 36. Internal Rate of Return Analysis a. Based on the calculations below using the tables in the textbook, the internal rate of return (IRR) is between the following percentages: (The percentages given here must be as close as you can get within the constraints of the textbook tables.) 15% & Incorrect 15% Cash Flow In (Out) Present Value ? % (use trial and error) Present Factor Value 1.0000 Factor 1.0000 Incorrect ( 28.000) 2.8550 Item Description Purchase price (today) Annual maintenance costs (years 1-4) Annual savings (years 1-4) Salvage value (end of year 4) Net present value 79,940) Correct Incorrect Incorrect Incorrect Incorrect b. Use the dropdown menu to select the best answer from the options below. a. The company should purchase the machine since the IRR is lower than the company's required rate of return of return of 11%. b. The company should not purchase the machine since the IRR is lower than the company's required rate of return of return of 11%. c. The company should purchase the machine since the IRR is higher than the company's required rate of return of return of 11% b. The company should not purchase the machine since the IRR is higher than the company's required rate of return of return of 11%