Olive Corporation is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net cash flow of $251,400. The equipment will have an initial cost of $1,302,100 and an 8-year useful life with no salvage value. If Olive's cost of capital is 10%, what is the internal rate of return? (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1)
Note: Use the appropriate factor from the PV tables.
Multiple Choice
Between 8% and 10%
Between 6% and 8%
Less than zero
Greater than 10%