Internal Rate of Return

Lansing, Inc. is considering purchasing equipment costing $104,025 with a 8-year useful life. The equipment will provide an annual cost savings of $19,500. Cleaners requires a 11% rate of return.

Part 1.The internal rate of return (IRR) on this equipment is ___________%

Part 2. Lansing should _____________this investment.

A) Invest in

B) Accept

C) Reject