]Creighton Music is considering investing $650,000 in private lesson studios that will have no residual value. The studios are expected to result in annual net cash inflows of $95,000 per year for the next ten years. Assume that Creighton Music uses a 10% hurdle rate. What is the approximate internal rate of return (IRR) of the studio investment?

The internal rate of return (IRR) is between: a) 5% and 6% b) 6% and 8% c) 8% and 10% d) 4% and 5%

Present Value of $1 Periods l 1% 2% 3% 4% 5% 6% 896 | 1096 | 1296 | 1496 | 1696 | 1896 | 20% 0.990 0.980 0.9710.9620.9520.943 0.9260.909 0.893 0.8770.862 0.847 0.833 2 0.9800.9610.943 0.9250.907 0.890 0.857 0.8260.7970.769 0.743 0.718 0.694 3 0.9710.9420.915 0.889 0.864 0.840 0.7940.7510.7120.6750.641 0.609 0.579 4 0.961 0.9240.888 0.855 0.823 0.7920.735 0.6830.6360.5920.552 0.516 0.482 5 0.9510.906 0.863 0.822 0.784 0.747 0.681 | 0.6210.5670.5190.476 0.4370.402 6 0.942 0.888 0.837 0.790 0.746 0.705 0.630 0.5640.5070.4560.410 0.370 0.335 7 0.933 0.8710.813 0.760 0.711 0.665 0.583 0.5130.4520.4000.3540.314 0.279 8 0.923 0.853 0.789 0.731 0.677 0.627 0.540 0.4670.4040.3510.305 0.266 0.233 9 0.914 0.837 0.766 0.703 0.645 0.5920.500 0.4240.3610.3080.2630.225 0.194 10 0.9050.820 0.744 0.676 0.614 0.558 0.4630.386 0.3220.2700.2270.191 0.162 11 0.896 0.804 0.722 0.650 0.585 0.527 0.4290.350 0.2870.2370.195 0.162 0.135 12 0.887 0.788 0.701 0.625 0.557 0.497 0.3970.3190.2570.208 0.168 0.1370.112 13 0.8790.773 0.681 0.601 0.530 0.4690.368 0.2900.2290.182 0.145 0.1160.093 14 0.870 0.758 0.661 0.577 0.505 0.442 0.3400.2630.2050.1600.125 0.099 0.078 15 0.861 0.743 0.642 0.555 0.481 0.417 | 0.3150.2390.1830.140 0.1080.084 0.065 20 0.820 0.673 0.554 0.456 0.377 0.312 0.2150.1490.1040.073 0.051 0.0370.026 25 0.780 0.610 0.478 0.375 0.2950.2330.1460.0920.0590.038 0.024 0.016 0.010 30 0.742 0.552 0.412 0.308 0.231 0.1740.0990.0570.0330.020 0.012 0.0070.004 40 0.672 0.4530.307 0.208 0.142 0.097 0.046 0.0220.0110.005 0.003 0.001 0.001