Suppose a firm invests $100 in a new, one-year project. At the end of the year, the investment has earned a rate of return of 12% on that investment. At the end of the year, the firm takes its 12% return and sells the original investment for $100, so the total cash inflow at the end of Year 1 is $100 plus the cash return. If the firm has a 12% cost of capital, what is the NPV (the net present value) of this investment?

$0

$12

$112

$88

$100