Rubio LLC, is considering an investment in an office building that has the following cash flows:

Purchase Year 0.......$-2,150,000

Year 1.....208,000

Year 2.....207,000

Year 3.....220,000

Year 4.....224,000

Year 5.....230,000 and a sale @ $3,050,000 takes place at end of year 5

The company weighted average cost of capital that they use as their discount rate for calculations is 10%

Assume that the company bought the office building using 70% mortgage debt at an interest rate of 4% over 240 months

1. What Ould be the net cash flows after debt service in year 3

a.117,840

b.110,560

c.100,018

d.2,980,000