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A firm is considering a project that will result in a cash inflow of $500 at the end of the first ye

A firm is considering a project that will result in a cash inflow of $500 at the end of the first year. The cash inflow will grow at the constant rate of 6% per year forever. The firm finances through debt and equity, and has a debt−equity ratio of 1/3, a cost of equity of 18%, and a cost of debt of 8%. Assume the project has the same risk as the overall firm. Assuming the tax rate is 35%. If the project’s initial cost is $3,500, what is the net present value of the project?

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