Use the information for the question(s) below. Boulderado has come up with a new composite snowboard. Development will take Boulderado four years and cost $250,000 per year, with the first of the four equal investments payable today upon acceptance of the project. Once in production in Year 4 the snowboard is expected to produce annual cash flows of $200,000 each year for 10 years. Boulderado's discount rate (cost of capital) is 10%. Calculate the IRR for the snow board project and use it to determine the maximum deviation allowable in the cost of capital estimate that leaves the investment decision unchanged. In other words, how much could the cost of capital change and not change the investment decision? The maximum deviation allowable is closest to:

Question 14 options:

A)

2.5%

B)

1.0%

C)

11.0%

D)

0.0%