An Entrepreneur Is Offered a Service Contract That Will Cost

An entrepreneur is offered a service contract that will cost him $600,000 initially.The contract has a 5 years of life and will generate an after tax cash inflow of $160,000 per year.The cost of capital of this project is 12%.What's the NPV of the project? Should the entrepreneur accept the contract?

A) -$23,236; reject
B) $23,236; accept
C) -$20,746; reject
D) $576,764; reject
E) $41,050; accept