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Dyrdek Enterprises has equity with a market value of $ 1 0 . 7 million and the market value of debt is $ 3 .

Dyrdek Enterprises has equity with a market value of $10.7 million and the market value of debt is $3.50 million. The company is evaluating a new project that has more risk than the firm. As a result, the company will apply a risk adjustment factor of 1.5 percent. The new project will cost $2.18 million today and provide annual cash flows of $571,000 for the next 6 years. The company's cost of equity is 11.03 percent and the pretax cost of debt is 4.87 percent. The tax rate is 21 percent. What is the project's NPV?
Multiple Choice
$378,137
$233,551
$234,824
$496,618
$252,458

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