A financial manager is evaluating a potential merger. The target and acquirer have market values of $2.5 million and $12 million, respectively. The manager believes the deal will increase the acquirers after-tax annual cash flow by $125,000 indefinitely. These expected cash flows should be discounted at a 14% rate. If the acquirer plans to offer the target shareholders 20% of the consolidated firms stock, then what is the NPV of the merger?

a. $15,392,857.14 b. $892,857.14 c. $314,285.71 d. $6,471,428.57 e. $114,285.71