A Firm Is Considering a Project Requiring an Investment of $27,000

Multiple Choice

A firm is considering a project requiring an investment of $27,000. The project would generate an annual cash flow of $6,296 for the next seven years. The company uses the straight-line method of depreciation with no mid-year convention. Ignore income taxes. The approximate internal rate of return for the project is

A) 6%.
B) 8%.
C) 12%.
D) 14%.