Wyatt oil is considering drilling a new self sustaining oil well at a cost of$1,000,000. This well will produce$100,000 worth of oil during the firstyear, but as oil is removed from the well the amount of oil produced will decline by2%, per year forever. If the Wyattoil's appropriate interest rate is8%, then the NPV of this oil well is closestto:

A.

$250,000

B.

$250,000

C.

$1,000,000

D.

$0