Answer (D) is correct. The total cash inflows are only $70,000 (5 × $14,000). Thus, whatever the discount rate, the NPV will be less than $20,000 ($70,000 – $50,000). The return in the first year is $14,000, or 28% of the initial investment. Since the same $14,000 flows in each year, the IRR is going to be greater than 10% (actually, it is almost 14%).