Krauth Company purchased a machine for $117,000. The machine has a life of seven years with no salvage value. It is expected that the machine will generate annual net cash inflows of $26,000 per year over its useful life. Assume Krauth Company employs a cost of capital of 10% on all capital investment projects.

The internal rate of return (IRR) on the machine is closest to:

6%

8%

9%

10%

12%

15%