Health Bars Is Considering a Two- Year Advertising Campaign

Multiple Choice

Health Bars is considering a two- year advertising campaign. The campaign will cost $60,000 at the end of each of the two years. The managers of Health Bars have estimated that the campaign will generate $42,000 a year in additional profit for the next three years. If the discount rate is 4 percent, what is the net present value of the advertising campaign?

A) $2,896
B) $3,952
C) $5,125
D) $3,388