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Business, 28.05.2020 20:02 skywil8981

Alpha Industries is considering a project with an initial cost of $7.9 million. The project will produce cash inflows of $1.63 million per year for 7 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.58 percent and a cost of equity of 11.25 percent. The debt–equity ratio is .59 and the tax rate is 40 percent. What is the net present value of the project?

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