Consider a new business line that your company will start:

Costs to launch the project: $6,000,000

Life of the project: 5 years

Cash inflows from the project:

• 5.81%

• 4.81%

• 6.21%

• none of the choices is correct

• 13,72%

Year One $ 400,000

Year Two $1,700,000

Year Three $2,650,000

Year Four $3,400,000

Year Five $ 950,000

Project Beta 0.83

Risk-Free Rate 1.20%

Market Risk Premium 5.55%

Default Risk Premium for companys bonds 1.45%

Maturity Risk Premium for companys bonds 1.15%

What is the required rate of return for this project (rounded to two decimal places)?