Bell Lab is considering spending $274,000 at Time 0 to test a new product. Depending on the test results, the company may decide to spend $568,000 at Time 1 to start production of the product. If the product is introduced and it is successful, it will produce aftertax cash flows of $421,000 a year for Years 2 through 5. The probability of successful test and investment is 60 percent. What is the net present value at Time 0 given a 12 percent discount rate?

$91,285.63

$98,493.12

$115,703.56

$106,745.04

$121,538.22