I don't understand the work that goes behind this kind of question! Help, please! :)

Question 34 Your good friend, Insolvencia, is asking you to invest $5,153 in her threeyear project. The beforetax cash ow is End of year 1 2 3 Cash ow $3,500 $4,000 $3,000 You'd be taxed at 40 per cent, and your opportunity cost is 2 per cent annually. Should you invest? A. Yes B. No Answer > A. The aftertax cash ow has a present value of $6,061.81, so an investment of $5,153 will leave you $909 richer