26 Note: The following data will be used for 5 questions: A firm is considering investing in a new piece of equipment. The equipment would cost $500,000 and would have shipping and installation cost of $125,000 purchased the machine would have an estimated useful life of 5 years and would be depreciated via a 5-year MACRS schedule (, 20.0% 32.0% 19.2%, 11.5%, 11.5% and 5.8%)Adoption of the project would also require an increase in working capital of $50,000. If the new equipment is purchased an old piece of equipment (which is still useable for more years) could be sold for $30,000. The old machine had been depreciated on a straight line basis and currently has a book value of zero The machine would generate annual incremental revenues of $250,000 and annual incremental expenses of $50,000. It is estimated that the machine can be sold as scrap at the end of its 5 year useful life for $80,000. The required return on projects of this nature is 14% and the firm's marginal tax rate is 40% Which of the following is closest to the projects IHR? 16.4 12.9% 14.1