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Alpha Industries is considering a project with an initial cost of $7.9 million. The project will produce cash inflows of $1.87 million per year for
Alpha Industries is considering a project with an initial cost of $7.9 million. The project will produce cash inflows of $1.87 million per year for 6 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.43 percent and a cost of equity of 11.15 percent. The debtequity ratio is .65 and the tax rate is 35 percent. What is the net present value of the project?
Multiple Choice
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$605,239
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$514,575
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$734,357
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$706,112
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$635,501
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