You are considering acquiring a firm that you believe can generate a cash flow of $120,000 next year and the cash flows will grow at a 3% rate forever. The firm is available for sale for $1,300,000. Assume that the beta of the firm is 1.2 the risk-free rate is 4 percent and the expected market risk premium is 7 percent.

What is the NPV of the investment in this firm?

Group of answer choices

$(457,894.74)

$1,007,692.31

$18,681.32

$(23,404.26)