Brad Miller is considering investing in a coin-operated laundromat. He can buy a small laundromat for $\$ 30,000$. Expected net revenues after expenses for maintenance and cleaning are $\$ 7,500$ per year for the next 10 years. At the end of 10 years, the machines will have a total scrap value of $\$ 500$.

1. Use the payback reciprocal method to estimate the intemal rate of return.

2. Interpretive Question: Under what circumstances would you recommend using the payback reciprocal method?