Alpha Industries is considering a project with an initial cost of $9.1 million. The project will produce cash inflows of $2.13 million per year for 6 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 6.15 percent and a cost of equity of 11.63 percent. The debt-equity ratio is .78 and the tax rate is 25 percent. What is the net present value of the project? Multiple Choice $583,143 $606,469 $524,829 $390,218 $499,837
Alpha Industries is considering a project with an initial cost of $9.1 million. The project will produce cash inflows of $2.13 million per year for 6 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 6.15 percent and a cost of equity of 11.63 percent. The debt-equity ratio is .78 and the tax rate is 25 percent. What is the net present value of the project? Multiple Choice $583,143 $606,469 $524,829 $390,218 $499,837
Chapter12: Sequences, Series And Binomial Theorem
Section12.3: Geometric Sequences And Series
Problem 12.57TI: What is the total effect on the economy of a government tax rebate of $1,000 to each household in...
Question
![Alpha Industries is considering a project with an initial cost of $9.1
million. The project will produce cash inflows of $2.13 million per year for
6 years. The project has the same risk as the firm. The firm has a pretax
cost of debt of 6.15 percent and a cost of equity of 11.63 percent. The
debt-equity ratio is .78 and the tax rate is 25 percent. What is the net
present value of the project?
Multiple Choice
$583,143
$606,469
$524,829
$390,218
$499,837](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6907833e-4df5-4282-9fda-863086ef325d%2F541da147-9a07-4d0c-b3ff-1caeb5cf0dfd%2Fyol4fa_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Alpha Industries is considering a project with an initial cost of $9.1
million. The project will produce cash inflows of $2.13 million per year for
6 years. The project has the same risk as the firm. The firm has a pretax
cost of debt of 6.15 percent and a cost of equity of 11.63 percent. The
debt-equity ratio is .78 and the tax rate is 25 percent. What is the net
present value of the project?
Multiple Choice
$583,143
$606,469
$524,829
$390,218
$499,837
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