Diamond Manufacturing Company Provides Glassware Machines for Major Department Store

Multiple Choice

Diamond Manufacturing Company provides glassware machines for major department store retailers. The company has been investigating a new piece of machinery for its production department. The old equipment has a remaining life of eight years and the new equipment will cost $141,969 with a eight-year life. The expected additional cash inflows are $37,000 per year. What is the internal rate of return?

A) 13%
B) 15%
C) 20%
D) 23%