Budgeted Fixed Overhead Accounting Homework Help (9)

Birch Company is considering the purchase of some equipment that would cost $119,790, would have a useful life of 5 years, and would have no salvage value. The equipment would be used in the company’s manufacturing plant, resulting in additional net cash inflows of $30,000 per year. The internal rate of return on the investment in the equipment is closest to:

A.

8%

B.

10%

C.

14%

D.

12%