The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computers price is $40,000, and it falls in the MACRS 3-year class with the applicable depreciation rates of 33%, 45%, 15%, and 7%. Purchase of the computer would require an increase in net operating working capital of $2,000. The computer would increase the firms before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for three years and then sold for $25,000. The firms marginal tax rate is 40%, and the projects cost of capital is 14%. What is the net investment required at t = 0?

a. -$42,000

b.-$36,600

c. -$38,600

d. -$40,000