13. Murphy Inc. is considering investing in specialized equipment costing $618,000. The equipment has a useful life of 5 years and a residual value of $55,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are:

Year 1	$ 250,000
Year 2	$ 190,000
Year 3	$ 152,000
Year 4	$ 112,000
Year 5	$ 95,000
Total	$ 799,000

Murphy Inc's required rate of return is 14%.

Is the internal rate of return of the investment equal to, higher than, or lower than 14%?

Appendix 9-1 (Present value of $1 received in n periods):

	12%	13%	14%	16%	18%
1	0.8929	0.8850	0.8772	0.8621	0.8475
2	0.7972	0.7831	0.7695	0.7432	0.7182
3	0.7118	0.6931	0.6750	0.6407	0.6086
4	0.6355	0.6133	0.5921	0.5523	0.5158
5	0.5674	0.5428	0.5194	0.4761	0.4371

Appendix 9-2 (Present value of an annuity of $1 per period):

	12%	13%	14%	16%	18%
1	0.8929	0.8850	0.8772	0.8621	0.8475
2	1.6901	1.6681	1.6467	1.6052	1.5656
3	2.4018	2.3612	2.3216	2.2459	2.1743
4	3.0373	2.9745	2.9137	2.7982	2.6901
5	3.6048	3.5172	3.4331	3.2743	3.1272

Group of answer choices

Cannot be determined from the given data.

Greater than 14%.

Less than 14%.

Equal to 14%.