Oak Enterprises accepts projects earning more than the firm's 12% cost of capital. Oak is currently considering a 10-year project that provides annual cash inflows of $45,000 and requires an initial investment of $287,100. (Note: All amounts are after taxes.)

a.Determine the IRR of this project. Is it acceptable?

b.Assuming that the cash inflows continue to be $45,000 per year, how many additional years would the flows have to continue to make the project acceptable (that is, to make it have an IRR of 12%)?

c.With the given life, an initial investment of$287,100 and cost of capital of 12%, what is the minimum annual cash inflow the investment would have to provide in order for this project to make sense for Oak's shareholders?