I know the WACC answer of 10.30% is correct, but it is saying my answer of 67,00

Question

I know the WACC answer of 10.30% is correct, but it is saying my answer of 67,000,000 for present value in requirement 2 is wrong. I need the correct present value for requirement 2 please.

Present Value = ?

Nally. Inc.. is considering a project that will result In initial aftertax cash savings 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 aftertax cost of debt of 6 1 percent. The cost saving proposal is somewhat riskier than the usual project the firm undertakes, management uses the subjective approach and applies an adjustment factor of +3 percent to the cost of capital for such rtsky projects Requirement 1: Calculate the WACC (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places What is the maximum cost Nally would be willing to pay for this project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Adjusted WACC = WACC + Adjustment factor

Adjusted WACC = 10.30% + 3% = 13.30%

Present Value = After tax cash Saving/(Adjusted WACC - growth rate)

Present Value = 6700000/(13.30% - 3%)

Present Value = $ 65,048,543.69

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