A project has an initial cost of $45,000. The incremental inflows associated with the project are $20,000 in year 1, $15,000 in year 2, $10,000 in year 3 and $8,000 in year 4. All cash inflows are at the end of the year. The appropriate discount rate for this project is 8.0%. (HINT: Possibly use Excel Worksheet)

What is the projects modified internal rate of return? Calculate to two decimal places.

a. 3.52%

b. 7.60%

c. 5.35%

d. 8.12%