Question: X Company must decide whether to continue using its current equipment or replace it with new, more efficient equipment. The following information is available for

X Company must decide whether to continue using its current equipment or replace it with new, more efficient equipment. The following information is available for the current and new equipment:

Current equipment
Current sales value $10,000
Final sales value 2,520
Operating costs 63,740
New equipment
Purchase cost $160,000
Final sales value 2,520
Operating cost savings 29,550

The current and new equipment will last for 6 years. If X Company replaces the current equipment, what is the approximate internal rate of return?

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