Problem:
Cleaners, Inc. is considering purchasing equipment costing $60,000 with a 6-year useful life. The equipment will provide cost savings of $14,600 and will be depreciated straight-line over its useful life with no salvage value. Cleaners require a 10% rate of return.
Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15%
6 4.623 4.486 4.355 4.231 4.111 3.784
Required:
Question: What is the approximate internal rate of return for this investment?
A) 9%
B) 11%
C) 10%
D) 12%
Note: Please provide full description.