A Firm Is Considering a Project Requiring an Investment of $200,000

Multiple Choice

A firm is considering a project requiring an investment of $200,000. The project would generate an annual cash flow of $55,478 for the next five years. The company uses the straight-line method of depreciation with no mid-year convention. Ignore income taxes. The approximate internal rate of return for the project is

A) 9%.
B) 10%.
C) 12%.
D) 16%.