INTERNAL RATE OF RETURN Gardner Company produces a variety of gardening tools and aids. The company is examining the possibility of investing in a new production system that will reduce the costs of the current system. The new system will require a cash investment of $4,607,200 and will produce net cash savings of $800,000 per year. The system has a projected life of nine years.

Required:

Calculate the internal rate of return for the new production system.

Cornerstone Exercise