Murphy's Authentic is considering a project with an initial cost of $124,000. The project will not produce any cash flows for the first three years. Starting in Year 4, the project will produce cash inflows of $85,000 a year for three years. This project is risky, so the firm has assigned it a discount rate of 15 percent. What is the project's net present value?

1. $3,606.89
2. $131,000
3. −$3,140.95
4. $3,136.43
5. $105,222