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Stackhouse Industries has a new project available that requires an initial investment of $5.9 million. The project will provide unlevered cash flows of $815,000 per year for the next 20 years. The company will finance the project with a debt-to-value ratio of .45. The company’s bonds have a YTM of 6 percent. The companies with operations comparable to this project have unlevered betas of 1.29, 1.22, 1.44, and 1.39. The risk-free rate is 3 percent, and the market risk premium is 6.2 percent. The company has a tax rate of 35 percent.
What is the NPV of this project?