Petrus Company Is Looking at an Energy-Saving Investment Which Will

Petrus Company is looking at an energy-saving investment which will cost $500,000 and will save the company $300,000 in the first year, $200,000 in the second year, and $48,000 in the third year. They have a hurdle rate of 7%, and they believe this project will have a return somewhere close to the hurdle rate. Please refer to the tables below and calculate the IRR of the investment.
$\begin{array}{|c|c|c|c|c|c|c|}\hline \text {Present Value of}\\ \text {an Annuity of }\\\$1\\\hline&5\%&6\%&7\%&8\%&9\%&10\%\\\hline1 & 0.952& 0.943 & 0.935 & 0.926 & 0.917 & 0.909 \\\hline 2& 0.907 & 0.890 & 0.873 & 0.857 & 0.847 & 0.826 \\\hline 3& 0.864 & 0.840 & 0.816 & 0.794 & 0.771 & 0.751 \\\hline 4& 0.823 & 0.792 & 0.763 & 0.735 & 0.708 &0.683 \\\hline 5& 0.784 & 0.747 & 0.713 & 0.681 & 0.650 &0.621 \\ \hline\end{array}$

Choose the option that comes closest to describing the actual IRR.

A) Less than 6%
B) Between 6% and 7%
C) Exactly 7%
D) More than 7%