Och Inc. is considering a project that will result in initial after$-$tax cash savings of $$4\mathrm{.}2$ million at the end of the first year, and these

savings will grow at a rate of $3$ percent per year, indefinitely. The firm has a target debt$-$to$-$equity ratio of $0\mathrm{.}62,$ a cost of equity of $11$

percent, and an after$-$tax cost of debt of $4\mathrm{.}5$ 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 $+1$ 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? $($In your computations, round the WACC

percentage to $2$ decimal places. Do not round other intermediate calculations. Round the final answer to the nearest whole dollar

amount. Omit $ sign in your response.$)$

Maximum cost