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Dyrdek Enterprises has equity with a market value of $11.1million and the market value of debt is $3.70 million. The companyis evaluating a new project that has more risk than the firm. As aresult, the company will apply a risk adjustment factor of 1.9percent. The new project will cost $2.26 million today and provideannual cash flows of $591,000 for the next 6 years. The company'scost of equity is 11.19 percent and the pretax cost of debt is 4.91percent. The tax rate is 40 percent. What is the project's NPV?
