Washington Industries Inc. is considering a project that has an initial after-tax outlay or after-tax cost of $350,000. The respective future cash inflows from its five-year project for years 1 through 5 are $75,000 each year. Washington expects an additional cash flow of $50,000 in the fifth year (Thus, the company receives $125,000 in total for the fifth year.). Cash inflows occur at the end of each year. The firm uses the IRR method and has a hurdle rate of 10%. Will Washington accept the project? Why/why not?

Washington accepts the project because it has a positive IRR.

Washington rejects the project because it has an IRR less than 10%.

Washington accepts the project because it has an IRR greater than 5%.

There is not enough information to answer this question.

Washington accepts the project because it has an IRR greater than 10%.