I keep getting an incorrect answer for Requirement 2 on this problem. The answer

Question

I keep getting an incorrect answer for Requirement 2 on this problem. The answer is not $65,048,543.69 can someone please give me the correct answer. Please and Thank You

Nally, Inc., is considering a project that will result in initial altertax cash saving of $6.7 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-equity ratio of .66, a cost of equity of 13.1 percent, and an altertax cost of debt of 6.1 percent. The cost-saving proposal is somewhat riskier than the usual project the firm undertakes; management use the subjective approach and applies an adjustment factor of +3 percent to the cost of capital for such risky projects. Calculate the WACC. What is the maximum cost Nally would be willing to pay for this project?

Explanation / Answer

PV = 6700000 / (.103 - .03)

= 91780821.92

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