Q$10$: Henrie$$s Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $$151,410,$ including freight and installation. Henrie$$s estimated the new machine would increase the company$$s cash inflows, net of expenses, by $$42,000$ per year. The machine would have a five$-$year useful life and no salvage value.

Click here to view Exhibit $7$B$-1$ and Exhibit $7$B$-2,$ to determine the appropriate discount factor$($s$)$ using table.

Required:

$1.$ What is the machine$$s internal rate of return?

Note: Round your answer to the nearest whole percentage, i$.$e$.0\mathrm{.}123$ should be considered as $12\%.$

$2.$ Using a discount rate of $12\%,$ what is the machine$$s net present value? Interpret your results.

$3.$ Suppose the new machine would increase the company$$s annual cash inflows, net of expenses, by only $$36,930$ per year. Under these conditions, what is the internal rate of return?

Note: Round your answer to the nearest whole percentage, i$.$e$.0\mathrm{.}123$ should be considered as $12\%.$