Question: Alpha Industries is considering a project with an initial cost of $9.2 million. The project will produce cash inflows of $1.72 million per year for

Alpha Industries is considering a project with an initial cost of $9.2 million. The project will produce cash inflows of $1.72 million per year for 8 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.97 percent and a cost of equity of 11.51 percent. The debt-equity ratio is .72 and the tax rate is 24 percent. What is the net present value of the project?

Multiple Choice

$399,668

$484,930

$419,651

$252,705

$466,279

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