Wendell's Donut Shoppe is investigating the purchase of a new $18,600 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $3,800 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 1,000 dozen more donuts each year. The company realizes a contribution margin of $1.20 per dozen donuts sold. The new machine would have a six-year useful life.

What would be the total annual cash inflows associated with the new machine for capital budgeting purposes?

annual savings in part time help

added contribution margin from expanded sales

annual cash inflows

Find the internal rate of return promised by the new machine.(Round your 'IRR' answer to nearest whole percentage.)