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A firm needs to purchase equipment for its 2 , 0 0 0 drive - ins nationwide. The total cost of the equipment ( not

A firm needs to purchase equipment for its 2,000 drive-ins nationwide. The total cost of the equipment (not including flotation costs) is $2 million. It is estimated that the after-tax cash inflows from the project will be $210,000 annually in perpetuity. The firm's optimal capital structure consists of 40% debt and 60% equity. The firm's cost of equity is 13%, its pretax cost of debt is 8%, and the flotation costs of debt and equity are 2% and 8%, respectively. What is the dollar flotation cost for the proposed financing? (Round your final answer to the nearest dollar.)
$142,098
$112,000
$131,230
$118,644
None of the above are correct.
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