Adams Corporation is considering an investment in in new machinery that is expected to lower future operating costs. Information regarding this new machinery is as follows: Cost $30,000 Salvage value in five years $0 Estimated useful life 5 years Annual depreciation $6,000 Expected annual reduction in operating costs $8,000 Based on the information above, what is the internal rate of return on this project (round to the nearest 1/2%)? Present value tables or a financial calculator are required.

Group of answer choices

13.5%

25.0%

37.5%

10.5%