Problem 12-18 Net present value and internal rate of return methods [LO4]

The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $35,000. The annual cash flows have the following projections: Use Appendix B and Appendix D.

Year	Cash flow
1	$ 14,000
2	19,000
3	24,000
4	9,000
5	4,000

(A) If the cost of capital is 8 percent, what is the net present value of selecting a new machine? (Round "PV Factor" to 3 decimal places. Round all dollar values to the nearest dollar amount. Omit the "$" sign in your response.)

Net Present Value: $ ___?___

(B) What is the internal rate of return? (Round "PV Factor" to 3 decimal places. Round all dollar values to the nearest dollar amount. Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Internal Rate of Return: ___?___ %