Kelley Group Is Considering an Investment of $2 Million in an Asset

Kelley Group is considering an investment of $2 million in an asset with an economic life of four years.The cash revenues and expenses in year 1 are expected to be $1.8m and $0.5m respectively.Both revenues and expenses are expected to grow at 3 percent per year.The asset will be fully depreciated to zero using the straight line method over its economic life.The salvage value of the asset is expected to be $0.3m at the end of the fourth year.Kelley Group also needs to add net working capital of $0.1m immediately,and this capital will be recovered in full at the end of the project's life.The tax rate is 40%.What is the investment's cash flow in year 4?

A) $1.1323m
B) $1.4523m
C) $1.3323m
D) $1.3579m