Enable Company is considering the purchase of production equipment that costs $1100000. The equipment is expected to generate an annual cash flow of $400000 and have a useful life of 5 years with no salvage value. The firm's cost of capital is 13 percent. The straight-line method with no mid-year convention is used.

40 Ignoring income taxes, the net present value of the project is

1. A ($255,700)

2. B $308,000

3. C $255,700

4. D $900,000