What is the NPV of this project

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Question - Dorman Industries has a new project available that requires an initial investment of $5.7 million. The project will provide unlevered cash flows of $795,000 per year for the next 20 years. The company will finance the project with a debt-to-value ratio of .3. The company's bonds have a YTM of 6.7 percent. The companies with operations comparable to this project have unlevered betas of 1.27, 1.20, 1.42, and 1.37. The risk-free rate is 3.7 percent, and the market risk premium is 6.9 percent. The company has a tax rate of 40 percent.

What is the NPV of this project?

Reference no: EM132210961

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