- X Company is considering producing and selling a new product. After conducting a market research study that cost $4,400, company estimates are that sales of the product will be 8,100 units in each of the next four years, contribution margin per unit will be $6.00, and annual fixed costs will be $12,368.

In order to produce the new product, additional equipment would have to be purchased, costing $120,000, with no salvage value at the end of four years.

What is the internal rate of return of producing and selling this new product?

A: 0.07

B: 0.04

C: 0.08

D: 0.06

E: 0.03

F: 0.05