Based on market values, Gubler's Gym has an equity multiplier of 1.52 times. Shareholders require a return of 11.15 percent on the company's stock and a pretax return of 4.90 percent on the company's debt. The company is evaluating a new project that has the same risk as the company itself. The project will generate annual aftertax cash flows of $289,000 per year for 9 years. The tax rate is 39 percent. What is the most the company would be willing to spend today on the project?

Multiple Choice

• $1,731,793

• $1,778,775

• $1,626,236

• $2,050,380

• $1,682,313