Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a

first cost of $$120,000$ and a useful life of $15$ years. At the end of its useful life, the punch has no salvage value. Labor costs would

increase $$2,500$ per year using the gang punch, but raw material costs would decrease $$12,500$ per year. MARR is $5\frac{\%}{?}$ year.

Part a

What is the internal rate of return of this investment?

$\%$