The Spoon Restaurant Is Considering a Project with an Initial

Multiple Choice

The Spoon Restaurant is considering a project with an initial cost of $525,000. The project will not produce any cash flows for the first three years. Starting in year four, the project will produce cash inflows of $721,000 a year for three years. This project is risky, so the firm has assigned it a discount rate of 17 percent. What is the project's net present value?

A) $382,507.17
B) $389,211.76
C) $414,141.41
D) $451,329.69
E) $469,691.45