A company is deciding whether to purchase new equipment that costs $500,000.

Management estimates the life of the new asset to be four years and expects it to

generate an additional $160,000 of annual profits. In the fifth year, the company

plans to sell the equipment for its salvage value of $50,000.

Meanwhile, another similar investment option can generate a 10% return. This is

higher than the company's current hurdle rate of 8%. The goal is to make sure the

company is making best use of its cash.

Solve it by using irr method .