Darrin Corporation is considering a proposal to purchase a new piece of equipment. The cost of the equipment is $16,611. The equipment is estimated to provide an annual cash flow of $3,000 for the next nine years. The company has a required rate of return of 15%. Calculate the internal rate of return (IRR), and interpret the results. Use the present value of an annuity table.

Since the IRR is greater than the required rate of return, the proposal should be accepted.

Since the cash flows are evenly distributed, the proposal should be accepted.

Since the capital investment is higher than $15,000, the proposal should be rejected.

Since the IRR is lesser than the required rate of return, the proposal should be rejected.

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