Clean Car Washes Inc is considering opening a new car wash. There is a clause in the lease that allows the firm to break the lease at no cost in two years. The new car wash location will cost $6,000 per month to operate. If the location turns out to be a success, the firm will generate $16,000 per month in revenue in perpetuity; otherwise, the firm will generate $5,000 per month in revenue in perpetuity. There is a 50% probability that the location is a success, which will be known immediately after the car wash location is opened. As well, to setup the car wash costs $400,000. Assume the appropriate cost of capital is 0.565% per month

12) If the location turns out to be a failure, the NPV of the investment is closest to: a) -$400,000 b) -$422,000 c) $400,000 d) $1,400,000