Consider the following projects.

Project	C0	C1	C2	C3	C4	C5	C6
A	-1,000	+1,000	0	0	0	0	0
B	-2,000	+1,000	+1,000	+4,000	+1,000	+1,000	-500
C	-3,000	+1,000	+1,000	0	+1,000	+1,000	-500

Assume that this firms beta= 1.0 The expected market return is 8%.

The risk free rate is 4.5%. This company can borrow debt at 5.2%.

The firm has $5 billion in debt. It has 6 billion shares outstanding at $2 price/shr.

The corporate tax rate (Tc) = 21%

Question: What is the NPV of project B ?

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Multiple Choice

The NPV for project B is $3,458

The NPV for project B is $4,239

The NPV for project B is $4,115

The NPV for project B is $3,958

The NPV for project B is $3,850