Ridman Academy Is Considering Replacing Their Heating, Ventilation and Air

Multiple Choice

Ridman Academy is considering replacing their heating, ventilation and air conditioning (HVAC) system at a cost of $245,000. Annual cash savings from the new more efficient system will be $35,000 over the next 20 years. What is the internal rate of return for the project?

A) 10%
B) 11%
C) 12%
D) 13%
E) 14%