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 $125,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Annual labor costs would increase $4,000 using the gang punch, but annual raw material costs would decrease $16,000. MARR is 6.0 %/year.

1)What is the Internal Rate of Return of the investment?