The Initial Cost of a Project Is $10,000

Multiple Choice

The initial cost of a project is $10,000.  There is a 30% chance that it will be highly successful, in which case cash inflows of $4,500 are expected for the next four years.  There is a 70% chance that the project will be unsuccessful, in which case annual cash inflows of $3,200 are expected for four years.  The cost of capital is 12%.  What is the project's expected NPV?

A) $3,688
B) ($281)
C) $7,700
D) $904