XYZ is evaluating a 2-year project (the watercolor project) that would involve buying equipment for $86.000 that would be depreciated to zero over 2 years using straight-line depreciation. Cash flows from capital spending would be so in year 1 and 511.000 in year 2. Relevant annual revenues are expected to be 72.000 dollars in year 1 and 72.000 dollars in year 2. Relevant expected annual variable costs from the project are expected to be $15,000 in year 1 and 515.000 in year 2. Finally, the firm has no foxed costs in year 1 and one fixed cost in year 2 of the project. Yesterday, XYZ signed a deal with NorCal Tech to develop an IT plan. The terms of the deal require XYZ to pay NorCal Tech either $18,000 in 2 years from today if the watercolor project is pursued or 510,000 in 2 years from today if the watercolor project is not pursued. The tax rate is 25 percent and the cost of capital for the watercolor project is 5.8 percent. What is the net present value of the watercolor project? a. 510.129 (plus or minus 5100) b. 516,829 (plus or minus 5100) C $27.549 (plus or minus 5100) d. 514,372 (plus or minus 5100) e. None of the above is within $100 of the correct