Question 14 Your company is considering a new, 4-year project. In analyzing the project, the financial staff has brought together the following information: The new project will require an initial capital outlay of $80,000 at Year O. This outlay will be used to purchase new equipment. This equipment will be depreciated using a MACRS 5-year class life (i.e., depreciated over 6 years: 20%, 32% 19%, 12%, 12%, and 5%). The equipment will have a before-tax salvage value of $13,600 at the end of four years. Inventories will rise by $6,000 at Year 0, and accounts payable will rise by $3,500 at Year 0. This increase in net operating working capital will be recovered at the end of the project's life, Year 4. The new project is expected to have an economic life of four years. The business is expected to generate sales of $120,000 at Year 1, $100,000 at Year 2, $80,000 at Year 3, and $50,000 at Year 4. Each year, operating costs (excluding depreciation) are expected to be 60 percent of sales. The company expects to incur interest expense of $3,000 in each of the next 4 years. Because of externalities (economies of scale) with other divisions within the company, this project will add an additional (firm-wide) $3,500 of after-tax value each year. The company's tax rate is 40 percent. The company is very profitable, so any accounting losses on this project can be used to reduce the company's overall tax burden. The project's weighted average cost of capital (WACC) is 14 percent. What is the IRR for this project? Enter your answer in decimal format, to 4 decimal places, truncated. For example, if your answer is 12.445%, enter "0.1244