aa.7 First and Goal Corporation's stock returns have a covariance with the market portfolio of.0487. The standard deviation of the returns on the market portfolio is 20 percent andthe expected market risk premium is 6.7 percent. The company has bonds outstandingwith a total market value of $60 million and a yield to maturity of 6.5 percent. Thecompany also has 4.1 million shares of common stock outstanding, each selling for $32.The company's CEO considers the firm's current debt-equity ratio optimal. The corporatetax rate is 21 percent and the risk-free rate is 3.1 percent. The company is considering thepurchase of additional equipment that would cost $56 million. The expected unleveredcash flows from the equipment are $17.9 million per year for five years. Purchasing theequipment will not change the risk level of the firm.Calculate the NPV of the project. (Do not round intermediate calculations and enteryour answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g.,1,234,567.89)> Answer is complete but not entirely correct.NPV13,032,663.10 x

NPV is an indication of an addition in the value of the company resulting from a potential…

irst and Goal Corporation's stock returns have a covariance with the market portfolio of 0487. The standard deviation of the returns on the market portfolio is 20 percent and ne expected market risk premium is 6.7 percent. The company has bonds outstanding with a total market value of $60 million and a yield to maturity of 6.5 percent. The ompany also has 4.1 million shares of common stock outstanding, each selling for $32. The company's CEO considers the firm's current debt-equity ratio optimal. The corporate ax rate is 21 percent and the risk-free rate is 3.1 percent. The company is considering the urchase of additional equipment that would cost $56 million. The expected unlevered ash flows from the equipment are $179 million per year for five years Purchasing the