The First Trial of an IRR Interpolation Used an Interest

Multiple Choice

The first trial of an IRR interpolation used an interest rate of 15% and produced a NPV of ($81,450) and the second trial of IRR at 6% produced an NPV of $56,000. Assuming a straight-line relationship between IRR and NPV, what percent reduction from 15% would result in the project's IRR?

A) 5.3%
B) 11.1%
C) 9.8%
D) 7.6%
E) 13.1%