Blue Water Boats is considering a new project with perpetual revenue of $435,000, cash costs of $310,000, and a tax rate of 21 percent. The firm plans to issue $250,000 of debt at an interest rate of 7.3 percent to help finance the initial project cost of $475,000. The levered discount rate is 16.7 percent. What is the net present value of this project?
A) $279,985
B) $284,022
C) $128,211
D) ?$59,506
E) ?$168,424
A) $279,985
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