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Dyrdek Enterprises has equity with a market value of $12.4 million and the market value of...

Dyrdek Enterprises has equity with a market value of $12.4 million and the market value of debt is $4.35 million. The company is evaluating a new project that has more risk than the firm. As a result, the company will apply a risk adjustment factor of 1.7 percent. The new project will cost $2.52 million today and provide annual cash flows of $656,000 for the next 6 years. The company's cost of equity is 11.71 percent and the pretax cost of debt is 5.04 percent. The tax rate is 35 percent. What is the project's NPV?

  • $377,720

  • $529,270

  • $199,381

  • $201,876

  • $237,758

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✓ NPV of the project is $ 377720

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