Efrat Shoes Co. has concluded that additional equity financing will be needed to expand operations and that the needed funds will be best obtained through a rights offering. It has correctly determined that as a result of the rights offering, the share price will fall from $56 to $52.40 ($56 is the rights-on price: $52.40 is the ex-rights price, also known as the when-issued price). The company is seeking $28 million in additional funds with a per-share subscription price equal to $40. How many shares are there currently, before the offering? (Assume that the increment to the market value of the equity equals the gross proceeds from the offering.) (Do not round intermediate calculations and round your answer to nearest whole number, e.g., 32.) Number of old shares Efrat and Sons, Inc., is considering a new 7-year project to produce a new tent line. The equipment necessary would cost $1.95 million and be depreciated using straight-line depreciation to a book value of zero. At the end of the project, the equipment can be sold for 15 percent of its initial cost. The company believes that it can sell 30,500 tents per year at a price of $78 and variable costs of $37 per tent. The fixed costs will be $535,000 per year. The project will require an initial investment in net working capital of $249,000 that will be recovered at the end of the project. The required rate of return is 12.1 percent and the tax rate is 34 percent. What is the NPV? Multiple Choice $715,994 $1,398,683 ) $578,927 $533,707