Wet and Wild Water Company drills small commercial water wells. The company is in the process of analyzing the purchase of a new drill. Information on the proposal is provided below.

Initial investment:

Asset $160,000

Working capital $ 32,000

Operations (per year for four years):

Cash receipts $160,000

Cash expenditures $ 88,000

Disinvestment:

Salvage value of drill (existing) $ 16,000

Discount rate 20%

What is the net present value of the investment? Assume there is no recovery of working capital.

a. $(62,140)

b. $10,336

c. $42,362

d. $186,336