The Golf Range Is Considering Adding an Additional Driving Range

The Golf Range is considering adding an additional driving range to its facility.The range would cost $229,000, would be depreciated on a straight-line basis over its seven-year life, and would have a zero salvage value.The anticipated revenue from the project is $62,500 a year with $18,400 of that amount being variable cost.The fixed cost would be $15,700.The firm believes that it will earn an additional $22,500 a year from its current operations should the driving range be added.The project will require $3,000 of net working capital, which is recoverable at the end of the project.What is the internal rate of return on this project at a tax rate of 34 percent?

A) 8.32 percent
B) 8.68 percent
C) 7.47 percent
D) 11.09 percent
E) 12.14 percent