The following information is relevant for questions 8.3 to 8.5

A company is considering an investment project which involves the purchase of machinery. The project has a four year life at the end of which the machinery will be sold for 40,000. The project will result in the following cash flows:

Initial investment120,000

Year 1 cash inflow35,000

Year 2 cash inflow40,000

Year 3 cash inflow55,000

Year 4 cash inflow30,000

The company's policy is to depreciate machinery on a straight line basis over its estimated life. The company has a cost of capital of 10%.

The net present value of the proposed investment is:

Select one:

A.100,000

B.66,650

C.26,650

D.33,970