Question: West Minster Properties is considering a project which has an initial start up cost of $840,000. The firm maintains a debt-equity ratio of .60. The

West Minster Properties is considering a project which has an initial start up cost of $840,000. The firm maintains a debt-equity ratio of .60. The flotation cost of debt is 8 percent and the flotation cost of equity is 13 percent. The firm has sufficient internally generated equity to cover the equity cost of this project. What is the initial cost of the project including the flotation costs?

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