Damon Is Contemplating Taking a Deal with His Uncle,who Is

Multiple Choice

Damon is contemplating taking a deal with his uncle,who is a very successful entrepreneur.He must pay his uncle $50,000 this year and an additional $50,000 at the end of both the fifth and tenth year.This would allow him to receive a perpetual annual cashflow of $12,000.What is the NPV of this offer if the interest rate is 10%?

A) $120,000
B) $30,000
C) $220,323.23
D) $69,676.77
E) $19,676.77