WineCo is considering an investment in a proposed project which requires an initial expenditure of $40,000 at t = 0. This expenditure can be depreciated at the following annual rates:

Year Depreciation Rate Depreciation

1 33.33% 13,332

2 44.45 17,780

3 14.81 5,924

4 7.41 2,964

The project has an economic life of two years. The projects revenues are forecasted to be $50,000 a year. The projects operating costs (not including depreciation) are forecasted to be $40,000 a year. After two years, the projects estimated salvage value is $20,000. The companys WACC is 10 percent, and its corporate tax rate is 40 percent.

What is the projects operating cash flow in Year 1?

A) $15,555

B) -$1,999

C) $11,333

D) $13,112

E) -$4,668