Wt4r Company is considering buying a new machine and has gathered

the following information about the purchase:

Initial investment ................$81,309

Annual cost savings ...............?

Life of machine ...................12 years

Salvage value .....................$0

Cost of capital ...................3%

Net present value .................$68,001

Ignore income tax effects in your calculations.

The internal rate of return (IRR) of the new machine is closest to: