Find what is the approximate internal rate of return

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Sheridan, Inc. is considering purchasing equipment costing $40000 with a 6-year useful life. The equipment will provide annual cost savings of $9730 and will be depreciated straight-line over its useful life with no salvage value. Sheridan requires a 10% rate of return.

Present Value of an Annuity of 1

Period        8%        9%        10%         11%        12%        15%
6             4.623   4.486         4.355     4.231       4.111       3.784

Problem 1: What is the approximate internal rate of return for this investment?

Reference no: EM132778915

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