1.

The Greasy Spoon Restaurant is considering a project with an initial cost of $525,000. The project will not produce any cash flows for the first three years. Starting in year 4, the project will produce cash inflows of $721,000 a year for three years. This project is risky, so the firm has assigned it a discount rate of 16 percent. What is the project's net present value?

A.

$417,294.85

B.

$424,591.11

C.

$451,786.86

D.

$492,255.56

E.

$512,408.23