Present value of an Annuity of $1 in Arrears

Periods	4%		6%		8%		10%		12%		14%
1	0.962		0.943		0.926		0.909		0.893		0.877
2	1.886		1.833		1.783		1.736		1.690		1.647
3	2.775		2.673		2.577		2.487		2.402		2.322
4	3.630		3.465		3.312		3.170		3.037		2.914
5	4.452		4.212		3.993		3.791		3.605		3.433
6	5.242		4.917		4.623		4.355		4.111		3.889
7	6.002		5.582		5.206		4.868		4.564		4.288
8	6.733		6.210		5.747		5.335		4.968		4.639
9	7.435		6.802		6.247		5.759		5.328		4.946
10	8.111		7.360		6.710		6.145		5.650		5.216

Lucas Company is considering a project with an initial investment of $530,250 in new equipment that will yield annual net cash flows of $95,000, and will be depreciated at $75,750 per year over its seven year life. What is the internal rate of return?

a.10%

b.8%

c.12%

d.6%

e.14%