You are evaluating a project that would require $1.2 million of capital expenditure today. You estimate it will generate $350,000 per year in added revenues and $100,000 added costs per year, for the next five years.

The fixed assets will have $120,000 of salvage value and are eligible for 100% bonus depreciation. You will need to hold additional inventory worth $80,000 while the project is running. Your firm's tax rate is 21%. What is the project IRR?

a) 7.4% b) 15.6% c) 3.6% d) 11.1% e) 9.9%