Suppose a project costs $4,000 and is expected to bring in an annual cash flow of $1,000 in the first two years and $1,500 in the last two years. Under the GAAP Matching Principle, the accountants would not treat that initial outlay as an immediate expense. Instead, they depreciate that $4,000 over 4 years and deduct an equal amount each year to obtain accounting income. Given a 10% discount rate, what is the NPV of the project? Should you accept this project?

• A. $717; Accept.
• B. -$3,283; Reject.
• C. $1,000; Accept.
• D. -$113; Reject.