Assume that capital markets do not exist. Ryan has $$85,000$ today $(t=0)$ and will receive $$105,000$ in exactly one year $(t=1).$ The

graph below illustrates point $Y$ : having $$85,000$ now and receiving $$105,000$ next year. Here, if no capital or financial market exists,

then Ryan must consume $$85,000$ now and $$105,000$ next year. Next consider this case when borrowing and lending at $r=10\%$ are

available in the financial markets; Ryan now has a real investment opportunity, or business project. If Ryan decides to accept this

opportunity, it will cost $$27,500$ now $(t=0)$ and will offer a risk$-$free payoff of $$40,000$ next year. Now, revisit the point $Y$ where Ryan

has $$85,000$ now and will receive $$105,000$ next year, but this time the real asset project exists. Assume that he still wants to consume

$$85,000$ now $(t=0),$ and answer the following.

a$.$ How much more can Ryan consume next year?

Ryan can consume

b$.$ Calculate the NPV of the project. $($Round the final answer to the nearest whole dollar.$)$

NPV