Tom is analyzing a project and has determined that the initial cost will be $1,350,000 and the required rate of return needs to be 10 percent. The project has a 60 percent chance of success and a 40 percent chance of failure. If the project fails, it will generate an annual after-tax cash flow of $375,000. If the project succeeds, the annual after-tax cash flow will be $550,000. He has further determined that if the project fails, he will shut it down after the first year and lose all of his original investment. If however, the project is a success, he can expand it with no additional investment and increase the after-tax cash flow to $595,000 a year for Years 2-5. At the end of Year 5, the project would be terminated and have no salvage value. What is the expected net present value of this project at Time 0?

$128,812.23

$104,284.60

$142,210.77

$115,129.06

$133,465.30