Problem 1.1. River Street Corporation has riskless debt with book value of $8 Million and market value of $10 Million. It has 1 Million shares outstanding. The share price has increased by 25 percent from the price of $16 one year ago. Its equity beta is 1.2. River Street plans to maintain the same capital structure in future. The risk-free rate is 4% and the market risk premium is 5%. The corporate tax rate is 20%. A new project with the same risk as the existing operations will require an initial investment of $1,000,000 and produce annual PRE-TAX cash flows of $360,000 for the next four years. Find the NPV of the new project to River Street.