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Dyrdek Enterprises has equity with a market value of $ 1 2 . 7 million and the market value of debt is $ 4 .

Dyrdek Enterprises has equity with a market value of $12.7 million and the market value of debt is $4.50 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 2.2 percent. The new project will cost $2.58 million today and provide annual cash flows of $671,000 for the next 6 years. The company's cost of equity is 11.83 percent and the pretax cost of debt is 5.07 percent. The tax rate is 25 percent. What is the project's NPV?

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