A firm needs to raise $165 million for a project. The firm faces flotation costs of 8% for equity and 2.5% for debt. Management has decided that the project is to be financed 60% with equity and 40% with debt. What is the true cost of the project?

Multiple Choice

$128.6 million

$142.2 million

$161.7 million

$171.6 million

$175.2 million