T RESOURCES Exercise 126 BSU Inc. wants to purchase a new machine for $31,400, excluding $1,300 of Installation costs. The old machine was bought five years ago and had an expected economic life of 10 years without salvage value. This old machine now has a book value of $2,200, and BSU Inc. expects to sell it for that amount. The new machine would decrease operating costs by $7,000 each year of its economic life. The straight-line depreciation method would be used for the new machine, for a six-year period BACK T NINE 2-3 with no salvage value. 12-9 1210 re lts bv StudyDetermine the cash payback period. (Round cash payback period to 1 decimal plscoe e.o. 10.5) Cash payback period Determine the approximate internal rate of return. (Round ansiver to 0 decimal places, e.a. 10. For calculation purposes use 5 decimal plecoes as dihuolayed in the factor table provided.) Internal rate of return Assuming the company has a required rate of return of 8%, determine whether the new machine should be purchased. The investment be accepted v 4344 AI: Rights Reserved. A Divis en ofahnwinasatan