Pink, Inc., is considering a project that will result in initial aftertax cash savings of $1.81 million at the end of the first year, and these savings will grow at a rate of 1 percent per year indefinitely. The firm has a target debt-equity ratio of .75, a cost of equity of 12.1 percent, and an aftertax cost of debt of 4.9 percent. The cost-saving proposal is somewhat riskier than the usual projects the firm undertakes; management uses the subjective approach and applies an adjustment factor of +2 percent to the cost of capital for such risky projects. What is the maximum initial cost the company would be willing to pay for the project? (Do not round intermediate calculations and enter your answer in dollars, not milions of dollars, rounded to 2 decimal places, e.g, 1,234,567.89.) 
Other questions asked by students
Accounting
Mechanical Engineering
Electrical Engineering
Basic Math
Accounting
Accounting
Q
Lopez Company is considering replacing one of its old manufacturing machines. The old machine has...
Accounting
Q
On December 31,2023, Dow Steel Corporation had 720,000 shares of common stock and 312,000 shares...
Accounting
Accounting