O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,980,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,400,000. The following information is available:

	Indiana proposal	Kentucky proposal
Required investment	$1,980,000	$2,400,000
Estimated life	12 years	12 years
Estimated residual life	$40,000	$50,000
Estimated annual cash inflows over the next 1212 years	$400,000	$500,000
Required rate of return	10%	10%

The net present value of the Kentucky proposal is closest to:

Present Value of $1

Periods	6%	8%	10%	12%	14%
7	0.665	0.583	0.513	0.452	0.400
8	0.627	0.540	0.467	0.404	0.351
9	0.592	0.500	0.424	0.361	0.308
10	0.558	0.463	0.386	0.322	0.270
11	0.527	0.429	0.350	0.287	0.237
12	0.497	0.397	0.319	0.257	0.208

Present Value of Annuity of $1

Periods	6%	8%	10%	12%	14%
7	5.582	5.206	4.868	4.564	4.288
8	6.210	5.747	5.335	4.968	4.639
9	6.802	6.247	5.759	5.328	4.946
10	7.360	6.710	6.145	5.650	5.216
11	7.887	7.139	6.495	5.938	5.553
12	8.384	7.536	6.814	6.194	5.660

A.$3,422,950.

B.$1,022,950.

C. $991,050.

D. $1,007,000.