TED Company is thinking about marketing a new writing software. Upfront costs to market and develop the software are $7,000,000. This new writing software is expected to generate profits of $1,300,000 per year for ten years. TED company will have to provide product support expected to cost $100,000 per year in perpetuity. What is the NPV of this investment if the discount rate is 5%? Should TED Company undertake this investment?

a.The NPV is $4,057,288. The firm should undertake the project.

b.The NPV is $1,038,256. The firm should undertake the project.

c.The NPV is $2,811,782. The firm should undertake the project.

d.The NPV is $2,111,782. The firm should undertake the project.