Question: A firm is considering a project that will generate net cash flows of $50,000 per year for ten years beginning immediately. The project has the

A firm is considering a project that will generate net cash flows of $50,000 per year for ten years beginning immediately. The project has the same risk as the firm's overall operations. If the firm's debt-to-equity ratio is 0.75, its required return on equity is 8% and its required return on debt is 6%, what is the most it could pay for the project? (Assume the firm pays no taxes)

Select one:

a. $435,504

b. $373,830

c. $235,960

d. $212,868

e. $348,880

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