Description
Alpha Industries is considering a project with an initial cost of
Alpha Industries is considering a project with an initial cost of $7.7 million. The project will produce cash inflows of $1.35 million per year for 9 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.52 percent and a cost of equity of 11.21 percent. The debt–equity ratio is .57 and the tax rate is 35 percent. What is the net present value of the project?
Multiple Choice
- $522,185
- $346,351
- $497,319
- $580,205
- $603,414
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Alpha Industries is considering a project with an initial cost of
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