Question: Aptra Corp is considering a new project which is an expansion of its main line of business and will be financed with the same debt-to-value

Aptra Corp is considering a new project which is an expansion of its main line of business and will be financed with the same debt-to-value ratio of 2/3 the firm always maintains in its capital structure. The project costs $9 million up front and generates a free cash flow of $5.2 million per year forever. The firm's debt beta is 0.29 and its equity beta is 1.66. The tax rate is 37%, the risk-free rate is 5% and the expected return on the market is 18%. What is the value of the interest tax shields associated with this project? Answer in $ million with one decimal place

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