Question: A $8 million project is expected to return $12 million next year. Your firm is in a 35% combined federal and state marginal income tax

A $8 million project is expected to return $12 million next year. Your firm is in a 35% combined federal and state marginal income tax bracket. You finance the project with $6 million in debt at a rate of 6%. If the appropriate project interest rate is 7%, what is the present value of the tax savings due to financing the project with debt?

243,757

126,000

117,757

121,879

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