A companys overall cost of capital is 9% and the corporate investment appraisal policy is to adjust the appropriate discount rate by 2% to the projects risk. The company is currently evaluating a 3-year project with an initial cost of 100,000 and annual cash flows of 40,000. The annual cash flows of the project are expected to have higher variance than the respective variance of the overall company cash flows. The Net Present Value of the project is going to be:

Select one:

a. -525.92

b. 4,972.64

c. 1,251.79

d. None of the proposed answers is correct

e. -2,251.41