(Ignore Income Taxes in This Problem

Multiple Choice

(Ignore income taxes in this problem.) The Yates Company purchased a piece of equipment that is expected to have a useful life of 7 years with no salvage value at the end of the 7-year period. This equipment is expected to generate a cash inflow of £32,000 each year of its useful life. If this investment has an internal rate of return of 14%, then the initial cost of the equipment is

A) £150,000.
B) £137,216.
C) £12,800.
D) £343,360.