Pillows Incorporated was considering an investment in the following project:

Required initial investment

Net annual after$-$tax cash inflow

Annual depreciation expense years$)$

Estimated salvage value

Life of the project in years

$$800,000$

$$167,000$

$$42,600$

$$161,000$

$15$

The internal rate of return $($IRR$)$ is $($Note: to solve this problem students will need access either to Appendix C$.$ Table $2($Chapter $12)$ provided.$)$:

A$.$ Less than $11\%.$

B$.$ Somewhere between $11\%$ and $13\%.$

C$.$ Somewhere between $13\%$ and $15\%.$

D$.$ Somewhere between $15\%$ and $20\%.$

E$.$ Greater than $20\%.$

A

B

C

D

E