Review Problems (Solved problem) Elgin Industry is analyzing the purchase of manufacturing equipment that will cost $20,000. The annual cash inflows for the next three years will be as follows: Salvage value of the equipment at the end of 3 year is 2000 a). Determine the internal rate of return using interpolation. b). With a cost of capital of 12 percent, should the machine be purchased? c). Determine the discounted Pay Back Period (PBP). d) Determine B/C ratio e) Determine the annual worth