The Risk of Fire at a Car Assembly Plant Is

The risk of fire at a car assembly plant is 0.2%.If the firm will receive a payment of $30 million in one year if there is a fire during the year,what is the net present value (NPV) of purchasing insurance if the firm will face financial distress costs of $5 million and issuance costs of $1 million in the event of a loss if the risk-free rate is 5%?

A) $11,429
B) $12,367
C) $12,967
D) $13,673
E) $14,356