$1.$ A real estate investment has the following expected cash flows:

Year Cash Flows

$1$ $$10,000$

$224,000$

$332,000$

$435,500$

The initial cost is $$75,000.$ The discount rate is $8\mathrm{.}125$ percent. What is the investment's net present

value?

a$.$ $$6,865$

b$.$ $$7,800$

c$.$ $$7,045$

d$.$ $$6,095$

e$.$ None of above