Kitchens and More Is an All-Equity Firm with 125,000 Shares

Kitchens and More is an all-equity firm with 125,000 shares of stock outstanding.The book value per share is $22,and the market-to-book ratio is 2.4.The current net income is $166,250.An expansion project will cost $1.08 million.Assume the price-earnings ratio remains constant.By what amount must the new project increase the net income for the stock price to remain constant?

A) $27,205
B) $31,750
C) $87,080
D) $112,400
E) $108,500