Jake plans to earn a big salary. He's only a junior, but he convinces his parents to buy him an expensive sports car, he says he'll pay them back one year after he graduates. What do you think of Jake's plan and what advice do you have for him?

Alpha industries is considering a project with an initial cost of $8 million. the project will produce cash inflows of $1.49 million per year for 8 years. the project has the same risk as the firm. the firm has a pretax cost of debt of 5.61 percent and a cost of equity of 11.27 percent. the debt–equity ratio is .60 and the tax rate is 35 percent. what is the net present value of the project?