Ritter Razors is considering an equipment investment that will cost $910,000. Projected net cash inflows over the equipment's three-year life are as follows: Year 1: $484,000; Year 2: $382,000; and Year 3: $292,000. Ritter wants to know the equipment's IRR.

Requirement

Use trial and error to find the IRR within a 2% range.

(Hint:

Use

RitterRitter's

hurdle rate of

1212%

to begin the trial-and-error process.) Use a business calculator or spreadsheet to compute the exact IRR.

Begin by calculating the NPV at three rates: 12%, 14%, and 16%.

(Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.)

The NPV at 12% is $

.

The NPV at 14% is $

.

The NPV at 16% is $

.

The IRR is somewhere between

12% and 14%

14% and 16%

, but closer to

14%

12%

16%

.

(Round your answer to two decimal places.)

The exact IRR using a business calculator or spreadsheet is

%.