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Dyrdek Enterprises has equity with a market value of $10.6 million and the market value of debt is $3.45 million. The company is evaluating
Dyrdek Enterprises has equity with a market value of $10.6 million and the market value of debt is $3.45 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 1.4 percent. The new project will cost $2.16 million today and provide annual cash flows of $566,000 for the next 6 years. The company's cost of equity is 10.99 percent and the pretax cost of debt is 4.86 percent. The tax rate is 21 percent. What is the project's NPV?
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