Your company is considering a project that will cost $1 million. The project will generate after-tax cash flows of $250,000 per year for 7 years. The WACC is 15%, and the firms target D/E ratio is .6 The flotation cost for equity is 5%, and the flotation cost for debt is 3%. What is the NPV for the project after adjusting for flotation costs?

Weighted average flotation cost:

If we consider the flotation costs, CF0 is higher than $ 1 million

CF 0 =

NPV =