A $11 million project is expected to return $19 million next year. Your firm is in a
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A $11 million project is expected to return $19 million next year. Your firm is in a 35% combined federal and state marginal income tax bracket. You finance the project with $8 million in debt at a rate of 6%. If the appropriate project interest rate is 11%, what is the present value of the tax savings due to financing the project with debt?
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