Vaughn, Inc. is considering purchasing equipment costing $29000 with a 7-year useful life. The equipment will provide cost savings of $6000 and will be depreciated straight-line over its useful life with no salvage value. Vaughn Inc. requires a 8% rate of return. What is the approximate internal rate of return for this investment?

Present Value of an Annuity of 1

Period = 6% 7% 8% 2% 10% 13%

7 5.582 5.389 5.206 5.033 4.868 4.423