Paradigm Toys is Considering a project. The Required initial vestment of the project is $100,000. The life of the projects is five years, and the company is expecting the make $20,000 for years 1 through 4 and 20,010 for Year 5. The cost of capital is 12%. Based on this information, the company decides not to take the project. Why is this the case?

1. Because the NPV of the project is less than $100,000.
2. Because the IRR of the project is less than $100,000.
3. Because the NPV of the project is negative.
4. Because the IRR of the project is negative.