Larson Company is considering the purchase of a machine with the following characteristics:

Initial cost	$16,000
Useful life of the machine	6 years
Required rate of return (discount rate)	12%
Reduction in annual net cash outflows	$4,120
Residual value (at end of useful life)	$0

Calculate the IRR (internal rate of return) for this machine (investment opportunity).

• 14%

• 16%

• 18%

• 12%