Based on market values, Gubler's Gym has an equity multiplier of 1.48 times. Shareholders require a return of 10.99 percent on the company's stock and a pretax return of 4.86 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 $281,000 per year for 9 years. The tax rate is 21 percent. What is the most the company would be willing to spend today on the project?

Multiple Choice

$1,581,858

$1,684,535

$1,993,490

$1,636,405

$1,707,441