1) A project has a 3 year life and cost $30,000. Inflation is 3% and the project is expected to generate the following returns:

year 1: $8,000

year 2: $12,000

year 3: $11,000

I) Given the rate of inflation the company will make money on this project

A) Yes

B) No

II) Whats the NPV contribution of the 2nd year ($12,000) return?

A) $12,000

B) $11,311.15

C) $22,857.14

D) $10,884.35