Panjandrum$$ Industries, a manufacturer of industrial$$ piping, is evaluating whether it should expand into the sale of plastic fittings for home garden sprinkler systems. It has made the accompanying estimates of free cash flows resulting from such a decision. There are concerns of the sensitivity of this project to changes in the cost of capital. For approximately what cost of capital does this project break$$ even? Round to the nearest whole number.Revenues

$3\mathrm{.}5$

$$ Manufacturing Expenses

$-0\mathrm{.}5$

$-$ Marketing Expenses

$-0\mathrm{.}25$

$-$ Capital Cost Allowance

$-0\mathrm{.}8$

$=$ EBIT

$1\mathrm{.}95$

$-$ Taxes $(40\%)$

$-0\mathrm{.}78$

$=$ Unlevered net income

$1\mathrm{.}17$

$+$ Capital Cost Allowance

$+0\mathrm{.}8$

$$ Additions to Net Working Capital

$-0\mathrm{.}2$

$$ Capital Expenditures

$-8\mathrm{.}00$

$=$ Free Cash Flow

$1\mathrm{.}77$ OPTIONS: A$.$

$16\%$

B$.$

$20\%$

C$.$

$12\%$

D$.$

$14\%$

E$.$

$18\%$