Question: ACS Industries is considering a project with an initial cost of $6.2 million. The project will produce cash inflows of $1.8 million a year for

ACS Industries is considering a project with an initial cost of $6.2 million. The project will produce cash inflows of $1.8 million a year for five years. The firm uses the subjective approach to assign discount rates to projects. For this project, the subjective adjustment is +1%. The firm has a pre-tax cost of debt of 6.7% and a cost of equity of 9.4%. The debt-equity ratio is 0.5 and the tax rate is 20%. What is the net present value of the project?

. What is the net present value of the project?

	a.	$742,467
	b.	$791,694
	c.	$813,792
	d.	$710,053

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