LaVeryndre Ltd

Multiple Choice

LaVeryndre Ltd. needs to replace the roof and re-insulate a small manufacturing facility at a cost of $70,000. Based on degree-days data, the company expects to save $17,600, $19,200, $15,700, $17,100 and $14,000 over the next five years. Using 4% and 12% as trial discount rates, determine the internal rate of return on the investment.

A) 4.5%
B) 6.5%
C) 9.0%
D) 7.2%
E) 5.2%