Alpha Industries is considering a project with an initial cost of $7.5 million. The project will produce cash inflows of $1.55 million per year for 7 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.46 percent and a cost of equity of 11.17 percent. The debt-equity ratio is .55 and the tax rate is 22 percent. What is the net present value of the project?

Multiple Choice

a. $337,986

b. $321,891

c. $375,540

d. $390,561

e. $263,559