Carte Blanco Company Is Evaluating an Investment of $1,000,000 Which

Multiple Choice

Carte Blanco Company is evaluating an investment of $1,000,000 which will yield cash flows of $257,000 per year for 5 years with no residual value. What is the internal rate of return? (Please choose the rate that is closest to the actual solution.)
$\begin{array}{|c|c|c|c|c|c|c|}\hline \text {Present Value of}\\ \text {an Annuity of }\\\$1\\\hline&5\%&6\%&7\%&8\%&9\%&10\%\\\hline1 & 0.952& 0.943 & 0.935 & 0.926 & 0.917 & 0.909 \\\hline 2& 1.859 & 1.833 & 1.808 & 1.783 & 1.759 & 1.736 \\\hline 3& 2.723 & 2.673 & 2.624 & 2.577 & 2.531 & 2 .487 \\\hline 4& 3.546 & 3.465 & 3.387 & 3.311 & 3.240 &3.170 \\\hline 5& 4.329 & 4.212 & 4.100 & 3.993 & 3.890 & 3 .791 \\\hline\end{array}$

A) 7%
B) 8%
C) 9%
D) 10%