The company PLI inc. has been in the field of freight transportation for over 15 years. Three years ago, the company bought a Heavy Freight truck that cost $ 650,000 for long-distance transport. But the experience is inconclusive as the realized and expected operating profit (EBITDA) is $ 95,000 per year and more is expected. Management is exploring the possibility of selling the Heavy Freight truck today for $ 270,000 to acquire a new F-150 Heavy Triton Special Edition truck for $ 170,000. The operating profit (BAAII) of the new F-150 HTS truck is estimated at $ 55,000 per year. The life of the project is estimated at 5 years. The company has a policy of not taking a capital cost allowance. Mr. Lesage, CEO of PLI inc, wants to make sure to make the right decision this time and as an intern he asks you to do the following calculations taking into consideration that the target rate is 12% . Assume a 20% tax rate, and ignore resale values:

Using marginal analysis, calculate the internal rate of return for the project. And based on the internal rate of return criterion, advise Mr. Lesage, CEO of PLI inc.