Acquired Developed Technology Is Expected to Generate After-Tax Operating Income

Acquired developed technology is expected to generate after-tax operating income of $50,000 in the first year and grow at a rate of 5% over the next two years. Depreciation expense included in operating expenses is expected to be $5,000 in the first year, growing at a rate of 3% over the next two years. The value of acquired developed technology is estimated as the present value of operating cash flow over the first three years. The appropriate discount rate is 20%, and cash flows are assumed to occur at year-end for purposes of valuing acquired developed technology.
Which value is closest to the amount at which the acquired developed technology should be reported on the acquiring company's balance sheet?

A) $ 85,000
B) $100,000
C) $121,000
D) $143,000