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Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below:
| | Project Soup | Project Nuts |
| Initial investment | $400,000 | | $600,000 | |
| Annual net income | 30,000 | 46,000 |
| Net annual cash inflow | 110,000 | 146,000 |
| Estimated useful life | 5 years | 6 years |
| Salvage value | -0- | -0- |
The company requires a 10% rate of return on all new investments.
| | Present Value of an Annuity of 1 |
| Periods | | 9% | | 10% | | 11% | | 12% | |
| 5 | 3.890 | 3.791 | 3.696 | 3.605 |
| 6 | 4.486 | 4.355 | 4.231 | 4.111 |
The internal rate of return for Project Nuts is approximately
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