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please help Exercise 12-15 (Algo) Internal Rate of Return and Net Present Value (LO12-2, LO12-3) Henrie's Drapery Service is investigating the purchase of a new
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Exercise 12-15 (Algo) Internal Rate of Return and Net Present Value (LO12-2, LO12-3) Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $113,730, including freight and installation. Henrie's estimated the new machine would increase the company's cash inflows, net of expenses, by $30,000 per year. The machine would have a five-year useful life and no salvage value. Click here to view Exhibit 12B-1 and Exhibit 12B-2. to determine the appropriate discount factor(s) using table. Required: 1. What is the machine's internal rate of return? (Round your answer to the nearest whole percentage, i.e. 0.123 should be considered as 12%.) 2. Using a discount rate of 10%, what is the machine's net present value? Interpret your results. 3. Suppose the new machine would increase the company's annual cash inflows, net of expenses, by only $27,000 per year. Under these conditions, what is the internal rate of return? (Round your answer to the nearest whole percentage, i.e. 0.123 should be considered as 12%.) % 1. Internal rate of retum 2 Net present value 3. Intemal rate of retum %Step by Step Solution
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