Based on market values, Gubler's Gym has an equity multiplier of 1.63 times. Shareholders require a return of 11.59 percent on the company's stock and a pretax return of 5.01 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 $311,000 per year for 8 years. The tax rate is 21 percent. What is the most the company would be willing to spend today on the project?

Multiple Choice

• $1,744,591

• $1,613,601

• $1,718,338

• $1,669,243

• $1,994,958