Maximum Inc. is considering the purchase of new equipment that will speed up the process for
producing disk drives. The equipment will cost $3,004,880 and have a life of six years with no
expected salvage value. The expected cash flows associated with the project are below:
	Year	Cash Revenues	Cash Expenses
	1	$1,600,000	$950,000
	2	1,600,000	950,000
	3	1,600,000	950,000
	4	1,600,000	950,000
	5	1,600,000	950,000
	6	1,600,000	950,000
a)	Determine the internal rate of return for this investment (4 marks)
b)	Assume the company has a required rate of return of 8%. Using
	the IRR method, should the company purchase the equipment? (2 marks)