Problem:
What is the NPV for the following project if its cost of capital is 15 percent and its initial after tax cost is $5,000,000 and it is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3 and $1,300,000 in year 4?
a. $371,764
b. ($137,053)
c. $1,700,000
d. None of the above
Note: Show supporting computations in good form.