A project costs $7 million and is expected to produce cash flows of $2 million per year for 10 years. The opportunity cost of capital is 16 percent. If the firm has to issue stock to undertake the project and issue costs are $0.5 million, what is the project's APV?
A. $2.17 million
B. $0.67 million
C. $9.67 million
D. $1.67 million
Answer: A
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