Based on market values, Gubler's Gym has an equity multiplier of 1.56 times. Shareholders require a return of 11.31 percent on the company's stock and a pretax return of 4.94 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 $297,000 per year for 9 years. The tax rate is 22 percent. What is the most the company would be willing to spend today on the project?

Multiple Choice

$2,086,715

$1,807,451

$1,728,075

$1,778,901

$1,670,472