A factory costs $50,000 to build and will generate a net cash flow of $10,000 per year forever (i.e., in perpetuity) with a 70 percent probability or $3,000 per year forever with a 30 percent probability. The factory could be sold for $40,000 after one year. If the discount rate is 10%, what is the expected NPV?

$31,727

-$6,455

$29,000

$50,000

$20,000