Tomorrowland is considering a project with an initial start up cost of $970,000. The firm maintains a debt-equity ratio of 0.2 and has a flotation cost of debt of 6.8 percent and a flotation cost of equity of 15.4 percent. The firm has sufficient internally generated equity to cover the equity cost of this project (Hint: you can assume that the flotation cost for equity is zero for this project). What is the initial cost of the project including the flotation costs?

$971,005

$982,265

$981,119

$992,386

$1,038,513