Exercise 13-15 Internal Rate of Return and Net Present Value [LO13-2, LO13-3] Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $137,280, including freight and installation. Henrie's has estimated that the new machine would increase the company's cash inflows, net of expenses, by $40,000 per year. The machine would have a five-year useful life and no salvage value. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using table. Required: 1. Compute the machine's internal rate of return to the nearest whole percent. Choose Numerator: I Internal Rate of Return Choose Denominator: = Factor = Factor Number of Years Internal Rate of Return 1 % 2. Compute the machine's net present value. Use a discount rate of 14%. Net present value 3. Suppose that the new machine would increase the company's annual cash inflows, net of expenses, by only $37,150 per year. Under these conditions, compute the internal rate of return to the nearest whole percent. Internal Rate of Return Choose Denominator: = Factor Choose Numerator: 1 Number of Years Internal Rate of Return Factor