Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $ including freight and installation. Henrie's estimated the new machine would increase the company's cash inflows, net of expenses, by $ per year. The machine would have a fiveyear useful life and no salvage value.
Click here to view Exhibit B and Exhibit B to determine the appropriate discount factors using table.
Required:
What is the machine's internal rate of return? Round your answer to the nearest whole percentage, ie should be considered as
Using a discount rate of what is the machine's net present value? Interpret your results.
Suppose the new machine would increase the company's annual cash inflows, net of expenses, by only $ per year. Under these conditions, what is the internal rate of return? Round your answer to the nearest whole percentage, ie should be considered as
table Internal rate of return,,
