Problem $6-20$ Inflation and Company Value

Sparkling Water, Incorporated, expects to sell $3\mathrm{.}7$ million bottles of drinking water each year in perpetuity. This year each bottle will sell for $$1\mathrm{.}46$ in real terms and will cost $$\mathrm{.}82$ in real terms. Sales income and costs occur at year$-$end. Revenues will rise at a real rate of $1\mathrm{.}8$ percent annually, while real costs will rise at a real rate of $\mathrm{.}8$ percent annually. The real discount rate is $5$ percent. The corporate tax rate is $23$ percent. What is the company worth today? $($Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e$.$g$.,1,234,567.)$