An investment is being considered by Spring Water Distributing requires an initial outlay of $ 1 million and an additional outlay of 5 million at the end of 3 years. The investment will provide return of $300 000 a year for first 3 years and $4,000 000 a year for the next 2 years. The cash inflows will be received at in the third quarter of the year. At the end of the 10 years the investment will be sold for $ 250 000. At a 10 percent effective required return, is this an attractive investment?

Select the correct answer

Yes, beacuse the NPV is $1.45 million

Yes, because the NPV is $1.59 million

Yes, because the NPV is $5.1 million

Yes, because the NPV is $1.3 million

Yes, because the NPV is $1.35 million

Yes, because the NPV is $5.05 million

No, the NPV cannot be determined