Scalia's Cleaning Service is investigating the purchase of an ultrasound machine for cleaning window blinds. The machine would cost $130,208, including invoice cost, freight, and training of employees to operate it. Scalia's has estimated that the new machine would increase the company's cash flows, net of expenses, by $26,000 per year. The machine would have a 14-year useful life with no expected salvage value. (Ignore income taxes.)

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

Required:

(Leave no cells blank - be certain to enter "0" wherever required.)

1. Compute the machine's internal rate of return. (Round discount factor(s) to 3 decimal places and final answer to the nearest whole percent. (i.e., 0.123 should be considered as 12%).)

2. Compute the machine's net present value. Use a discount rate of 18%. (Round discount factor(s) to 3 decimal places.)