X Company must decide whether to continue using its current equipment or replace it with new, more efficient equipment. The following information is available for the current and new equipment:

CURRENT EQUIPMENT:

Current sales value: $14,000

Final sales value: $3,650

Operating costs: $60,880

NEW EQUIPMENT:

Purchase cost: $164,000

Final sales value: $3,650

Operating costs savings: $31,470

The current and new equipment will last for 6 years. If X Company replaces the current equipment, what is the approximate internal rate of return?

A: 0.03

B: 0.04

C: 0.05

D: 0.06

E: 0.07

F: 0.08