Question: Alpha Industries is considering a project with an initial cost of $8.5 million. The project will produce cash inflows of $1.51 million per year for

Alpha Industries is considering a project with an initial cost of $8.5 million. The project will produce cash inflows of $1.51 million per year for 9 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.76 percent and a cost of equity of 11.37 percent. The debtequity ratio is .65 and the tax rate is 40 percent. What is the net present value of the project?

  • $751,147

  • $715,379

  • $494,235

  • $834,608

  • $867,993

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