Kadalai Company makes metal blanks which it sells to metal fabrication and stamping companies. The sales forecasts for the next four years are 410,000 bars a year. The president estimates that he can save $2,200 per year in fixed cash operating costs plus $0.05/bar during the next four years if he buys a machine to automate the process at a cost of $78,000. A salvage value of $16,000 is expected at the end of the four-year period. The companys minimum desired rate of return is 11%. The companys average tax rate is 20%.

Click here to view Exhibit 10-1 and Exhibit 10-2, to determine the appropriate discount factor(s) using tables.

Required:

What is the internal rate of return for the investment in the machine? (Round discount factor(s) to 3 decimal places and final answer to 2 decimal places. (i.e., 0.1234 should be considered as 12.34%).)