Question: Alpha Industries is considering a project with an initial cost of $9 million. The project will produce cash inflows of $2.09 million per year for

  1. Alpha Industries is considering a project with an initial cost of $9 million. The project will produce cash inflows of $2.09 million per year for 6 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.91 percent and a cost of equity of 11.47 percent. The debtequity ratio is .70 and the tax rate is 39 percent. What is the net present value of the project?

    1. $594,334

    2. $534,901

    3. $509,429

    4. $325,304

    5. $618,108

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