A Firm Needs to Raise $165 Million for a Project

A firm needs to raise $165 million for a project. If external financing is used, the firm faces flotation costs of 8% for equity and 2.5% for debt. If the project is to be financed 60% with equity and 40% with debt, how much cash must the firm raise in order to finance the project?

A) $128.6 million
B) $142.2 million
C) $161.7 million
D) $171.6 million
E) $175.2 million