Question: Alpha Industries is considering a project with an initial cost of $9.6 million. The project will produce cash inflows of $1.79 million per year for

Alpha Industries is considering a project with an initial cost of $9.6 million. The project will produce cash inflows of $1.79 million per year for 8 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 6.09 percent and a cost of equity of 11.59 percent. The debt-equity ratio is .76 and the tax rate is 23 percent. What is the net present value of the project?

Multiple Choice $407,262 $228,649 $470,614 $452,514 $387,869

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