Nancy's Notions pays a delivery firm to distribute its products in the metro area. Delivery costs are $36,000 per year. Nancy can buy a used truck for $10,000 that will be adequate for the next 3 years. Operating and maintenance costs are estimated to be $19,000 per year. At the end of 3 years, the used truck will have an estimated salvage value of $3,000. Nancy's MARR is 14%/year.
What is this investment's internal rate of return?
(Do all calculations to 5 decimal places and round final answer to nearest percentage point. The tolerance is +/- 1.)
1) IRR (%) =
2) Should Nancy buy the truck?