Applied Nanotech is thinking about introducing a new surface cleaning machine. The marketing department has come up with the estimate that Applied Nanotech can sell 14 units per year at $306,000 net cash flow per unit for the next five years. The engineering department has come up with the estimate that developing the machine will take a $15.1 million initial investment. The finance department has estimated that a discount rate of 13 percent should be used.

If unsuccessful, after the first year the project can be dismantled and will have an aftertax salvage value of $11.1 million. Also, after the first year, expected cash flows will be revised up to 19 units per year or to 0 units, with equal probability. What is the NPV?

A. $1,224,733.98

B. $1,128,732.85

C. $1,396,723.89

D. $1,254,679.77