Lebleu, Incorporated, is considering a project that will result in initial aftertax cash savings of $$1\mathrm{.}9$ million at the end of the first year, and these savings will grow at a rate of $1$ percent per year indefinitely. The company has a target debt$-$equity ratio of $\mathrm{.}75,$ a cost of equity of $13$ percent, and an aftertax cost of debt of $5\mathrm{.}8$ percent. The cost$-$saving proposal is somewhat riskier than the usual projects the firm undertakes; management uses the subjective approach and applies an adjustment factor of $+2$ percent to the cost of capital for such risky projects. What is the maximum initial cost the company would be willing to pay for the project? $($Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to $2$ decimal places, e$.$g$.,1,234,567\mathrm{.}89)$Problem $13-16$ WACC and NPV

$4\mathrm{.}54$ Lebleu, Incorporated, is considering a project that will result in InItial aftertax cash

savings of $$1\mathrm{.}9$ million at the end of the first year, and these savings will grow at a rate of

$1$ percent per year Indefinitely. The company has a target debt$-$equity ratio of $75,$ a cost

of equity of $13$ percent, and an aftertax cost of debt of $5\mathrm{.}8$ percent. The cost$-$saving

proposal is somewhat riskier than the usual projects the firm undertakes; management

uses the subjectlve approach and applies an adjustment factor of $+2$ percent to the cost

of capital for such risky projects. What is the maximum Initlal cost the company would be

willing to pay for the project? $($Do not round Intermedlate calculations and enter your

answer In dollars, not millilons of dollars, rounded to $2$ decimal places, e$.$g$.,$

$1,234,567\mathrm{.}89)$

Answer is complete but not entirely correct.