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Business, 07.05.2021 03:30 sm908361

Alpha Industries is considering a project with an initial cost of $8.8 million. The project will produce cash inflows of $1.68 million per year for 8 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.85 percent and a cost of equity of 11.43 percent. The debt–equity ratio is .68 and the tax rate is 40 percent. What is the net present value of the project?

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