Photochronograph Corporation (PC) manufactures time seriesphotographic equipment. It is currently at its target debt-equityratio of .60. It’s considering building a new $65 millionmanufacturing facility. This new plant is expected to generateaftertax cash flows of $9.4 million in perpetuity. The companyraises all equity from outside financing. There are three financingoptions:

1. A new issue of common stock: The flotation costs of the newcommon stock would be 8 percent of the amount raised. The requiredreturn on the company’s new equity is 14 percent.

2. A new issue of 20-year bonds: The flotation costs of the newbonds would be 4 percent of the proceeds. If the company issuesthese new bonds at an annual coupon rate of 8 percent, they willsell at par.

3. Increased use of accounts payable financing: Because thisfinancing is part of the company’s ongoing daily business, it hasno flotation costs, and the company assigns it a cost that is thesame as the overall firm WACC. Management has a target ratio ofaccounts payable to long-term debt of .15. (Assume there is nodifference between the pretax and aftertax accounts payablecost.)

What is the NPV of the new plant? Assume that PC has a 21percent tax rate. (Do not round intermediate calculations and enteryour answer in dollars, not millions, rounded to the nearest wholenumber, e.g., 1,234,567.)