please provide explanation.

A manufacturer is considering the purchase of new equipment for their production facility. The equipment costs 10,000 and will generate profits of 6, 200 in one year and 5,000 in two years. The manufacturer's cost of capital is 7.5%. Find the modified internal rate of return. (A) 7.0% (B) 7.2% (C) 7.5% (D) 7.8% (E) 8.0%