A Capacity Alternative Has an Initial Cost of $50,000 and Cash

Multiple Choice

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next six years. If the cost of capital (i.e., interest rate) is 8 percent, what is the approximate net present value of this investment?

A) $20,920
B) $26,160
C) $42,460
D) $70,920
E) $92,460