Problem:

T.L.C. inc is considering a investment with an intial cost of 175,000 that would be depreciated straight line to a zero book value over the life of the project. The cash inflows generated by the the project are estimated at 76,000 for the first two years and 30,000 for the following two years.

Requirement:

Question: What is the internal rate of return?

A. 9.27 percent

B. 9.98 percnet

C. 10.62 percent

D. 10.79 percent

E. 11.58 percent

Note: Provide support for your underlying principle.