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Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes

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Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.):

 Investment required in equipment$40,000 

Annual cash inflows $10,000 

Salvage value of equipment$0

Life of the investment 15years

Required rate of return 10%

The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.

The internal rate of return of the investment is closest to:

Multiple Choice

• 26%
• 24%
• 22%
• 28%