Woodfire Pizzeria is considering acquiring a new pizza oven. The pizza oven would cost $137,320, including installation and shippping. Woodfire estimated the new pizza oven would increase the companys cash inflows, net of expenses, by $40,000 per year. The pizza oven would have a five-year useful life and no salvage value.

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table.

Required:

1. What is the pizza oven's internal rate of return? (Round your final answer to the nearest whole percentage.)

2. Using a discount rate of 14%, what is the pizza oven's net present value?

3. Suppose the new pizza oven would increase the companys annual cash inflows, net of expenses, by only $38,090 per year. Under these conditions, what is the internal rate of return? (Round your final answer to the nearest whole percentage.)