13

that has mererises has equity with a market value of $1.3 million and the market value of debt is $3.40 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 11 percent. The new project will cost $210 million today and provide annual cash flows of $551,000 for the next 6 years. The company's cost of equity is 1.87 percent and the pretax cost of debt is 4.83 percent. The tax rate is 21 percent. What is the project's NPV? $266,983 $445,716 $239,782 $284,405 $362,974