West Coast Manufacturing Ltd. is considering buying an automated machine that costs $300,000. It requires working capital of $10,000. Annual cash savings are anticipated to be $80,000 for five years. The company uses straight-line depreciation. The salvage value at the end of five years is expected to be $20,000. The working capital will be recovered at the end of the machine's life.

Required: 1. Compute the accrual accounting rate of return based on the initial investment.

2. Compute the internal rate of return

3) How would you rank investment methods in desirability for the company? Explain with characteristics of each method.