An acquired company has previously unreported technology that meets the criteria for recognition as an identifiable intangible asset. Forecasted net cash inflow for the first year is $400,000 and it is expected to grow at a rate of 5% percent for the next two years. The appropriate discount rate is 8% percent. Which amount is closest to the correct value for the intangible asset, recorded at the date of acquisition? Assume all cash flows occur at the end of the year.

a. $1.03 million

b. $1.20 million

c. $1.08 million

d. $1.06 million