Assume the capital rationing will last for 2 years. Corporation A has $1,000 available to invest and

has a cost of capital of 10%. Any funds not used at the beginning can be invested for the 2-year

period at a 20% annual return. Funds available at the end of year 1 can be invested at 15% for the

remaining year of capital rationing. Find the NPV at t=2 (Terminal Value) for project A.

Project Initial Investment CF1 CF2 CF3

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A 800 300 400 500

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(a) $1,487.55. (b) $1,400. (c) $47.55. (d) $39.29.