A Firm Is Considering a Project That Requires an Initial

A firm is considering a project that requires an initial cash outflow of $1,000,000 for the purchase of a capital asset,which has an eight-year life and a CCA rate of 20 percent,with the asset class remaining open.The expected salvage value of the asset is $75,000 at the end of eight years.The project will generate sales revenue of $450,000 in the first year,which will grow at 5 percent per year in the subsequent years.Variable costs will be $200,000 for the first year,which will also grow at 5 percent per year.The firm's marginal tax rate is 40 percent and required return is 12 percent.What is the project's NPV?

A) $123,498
B) $166,707
C) $1,402,183
D) $1,509,326