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Business, 16.04.2020 20:41 xeno777

Alpha Industries is considering a project with an initial cost of $8.7 million. The project will produce cash inflows of $1.87 million per year for 7 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.82 percent and a cost of equity of 11.41 percent. The debt–equity ratio is .67 and the tax rate is 39 percent. What is the net present value of the project?

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