Project X has the following expected cash flows. An initial investment (cash outflow) of $110,000, followed by 4 years of cash inflows of $40,000 per year. Using a cost of capital of 10% the NPV for Project X is $16,800. You wish to do sensitivity analysis on the cost of capital. What increase in the cost of capital would cause the NPV to fall to zero?

options:

a)

1.7%

b)

5.0%

c)

6.9%

d)

4.1%