Stackhouse Industries has a new project available that requires an initial investment of $5.5 million. The project will provide unlevered cash flows of $775,000 per year for the next 20 years. The company will finance the project with a debt-to-value ratio of .25. The company’s bonds have a YTM of 6.5 percent. The companies with operations comparable to this project have unlevered betas of 1.25, 1.18, 1.40, and 1.35. The risk-free rate is 3.5 percent, and the market risk premium is 6.7 percent. The company has a tax rate of 35 percent.
What is the NPV of this project?