The Risk of Fire at a Car Assembly Plant Is

The risk of fire at a car assembly plant is 0.3%.If the firm will receive a payment of $20 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 $6 million and issuance costs of $1 million in the event of a loss if the risk-free rate is 5%?

A) $19,429
B) $20,000
C) $22,176
D) $23,981
E) $24,514