Jack and Jill's Place is a nonprofit nursery school run by the parents of the

enrolled children. Since the school is out of town, it has a well rather than a city

water supply. Lately, the well has become unreliable, and the school has had to

bring in bottled drinking water. The school's governing board is considering drilling

a new well $($at the top of the hill, naturally$).$ The board estimates that a new well

would cost $$4,697$ and save the school $$700$ annually for $10$ years. The school's

hurdle rate is $6$ percent.

Use Appendix A for your reference. $($Use appropriate factor$($s$)$ from the tables

provided.$)$

Required:

Compute the internal rate of return on the new well. Should the

governing board approve the new well?

Internal rate of return $....\%$

Approve yes? No$?$