The Walton Daily News is investigating the purchase of a new auxiliary press that has a projected life of 18 years. It is estimated that the new press will save $30,000 per year in cash operating costs.
A) If the new press costs $217,500, what is its internal rate of return? Is the press an acceptable investment if the company's required rate of return is 16%? Explain.
B) How much would the annual cash inflows (cost savings) have to be for the new press to provide the required 16% rate of return? Round your answer to the nearest whole dollar.