Heartland Farms is using the internal rate of return method as part of its consideration of the purchase of a new piece of equipment. Heartland has a 7% hurdle rate and a net capital investment of $250,000. After-tax cash flows are uneven and will materialized in the first year immediately upon making the investment and then only at the end of year two and three. the after tax cash flows at the end of year two and three are $108,000 and $98,900 respectively. Present value factors at 7% are as follows....

Present Value of $1 Present value of Annuity

Year 1 .9346 0.9346

Year 2 0.8734 1.8080

Year3 0.8163 2.6243

What is the necessary after-tax cash flow in Year 1 to achieve a 7% IRR

a). $74,155 b). $79,345 c). $80,732 d). $95,113