Bonita, Inc. is considering purchasing equipment costing $38000 with a 5-year useful life. The equipment will provide cost savings of $10300 and will be depreciated straight-line over its useful life with no salvage value. Bonita Inc. requires a 9% rate of return. What is the approximate internal rate of return for this investment?

Present Value of an Annuity of 1

Period -

5 7% - 4,100

8% - 3,993

9% - 3,890

10% - 3,791

11% - 3,696

14% - 3,433