A Firm Is Considering a Project Requiring an Investment of $30,000

Multiple Choice

A firm is considering a project requiring an investment of $30,000. The project would generate an annual cash flow of $7,251 for the next six 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) 11%.
B) 9%.
C) 10%.
D) 12%.