Leo is contemplating spending $\$ 400,000$ on new machinery. This will be used to produce a revolutionary type of lock, for which demand is expected to last three years. Equipment will be bought on 31 December 20X5 and revenue from the sale of locks will be receivable on the 31 December 20X6, $20 X 7$ and 20X8. Labour costs for the three years, payable in arrears, are estimated at $\$ 500,000$ per annum in current terms. These figures are expected to rise at the rate of $10 \%$ per annum.

Materials required for the three years are currently in stock. They originally cost $\$ 300,000$; they would cost $\$ 500,000$ at current prices although Leo had planned to sell them for $\$ 350,000$. The sales revenue from locks in the first year is projected at $\$ 900,000$. This figure will rise by $5 \%$ per annum over the product's life.

If Leo has a money cost of capital of $13 \%$, identify the net present value of the project (to the nearest $\$ 000$ ).

A.$\$ 130,000$

B. $\$ 23,000$

C. $\$ 52,000$

D. $\$ 126,000$