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Dyrdek Enterprises has equity with a market value of $10.7 million and the market value of...

Dyrdek Enterprises has equity with a market value of $10.7 million and the market value of debt is $3.50 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 1.5 percent. The new project will cost $2.18 million today and provide annual cash flows of $571,000 for the next 6 years. The company's cost of equity is 11.03 percent and the pretax cost of debt is 4.87 percent. The tax rate is 39 percent. What is the project's NPV?

rev: 12_10_2019_QC_CS-193406

Multiple Choice

  • $234,824

  • $233,551

  • $267,736

  • $378,137

  • $496,618

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