Own The Ice is evaluating the purchase of a new zamboni that costs $540,000, will have a CCA rate of 20%, an estimated useful life of 10 years and a zero terminal disposal price. The companys marginal tax rate is 32%. It is estimated that the zamboni will create the most amazing ice surface, attracting significant additional arena rentals and therefore increase annual before tax profits by $135,000.

The net present value of this investment using a 14% after tax rate of return is $34,245. Based on this information, calculate the internal rate of return to two decimal places using interpolation.

Multiple Choice

• 15.06%

• 15.89%

• 15.66%

• 15.27%

• None of the above