Sander is setting up a recording studio which will have an annual revenue of $80,000 and annual cost of $40,000. The studio will require an initial investment of $20,000. Sanders discount rate is 10%, and income tax where he lives, is 40%. In the investment year, depreciation on all items is 50%, then 30% the following year, and 20% in the next year, which is the end of the schedule. What is the net present value after two years of recording?

1. $71,500
2. $41,000
3. $29,200
4. $49,400