XYZ is considering buying a new, high efficiency interception system. The new system would be purchased today for $47,700.00. It would be depreciated straight-line to $0 over 2 years. In 2 years, the system would be sold for an after-tax cash flow of $14,600.00. Without the system, costs are expected to be $100,000.00 in 1 year and $100,000.00 in 2 years. With the system, costs are expected to be $79,000.00 in 1 year and $69,700.00 in 2 years. If the tax rate is 46.50% and the cost of capital is 8.40%, what is the net present value of the new interception system project?

a. $11893.11 (plus or minus $50)

b. $12724.27 (plus or minus $50)

c. $8553.76 (plus or minus $50)

d. $9953.14 (plus or minus $50)

e. None of the above is within $50 of the correct answer