20 NAV Letlago plc has established a joint venture with Wannako Ltd to build a new gold mine in Kenya. The initial investment in paving equipment is £12 million. The equipment will be depreciated using the 20 per cent reducing balance method over its economic life of five years, at the end of which it will be sold for its residual value. Earnings before interest, taxes and depreciation collected from the gold mine are projected to be £0.8 million per annum for 20 years starting from the end of the first year. The corporate tax rate is 23 per cent. The required rate of return for the project under all-equity financing is 19 per cent. The pre-tax cost of debt for the joint partnership is 8.5 per cent. To encourage investment in the country’s infrastructure, the Kenyan government will subsidize the project with a £10 million, 15-year loan at an interest rate of 7 per cent per year. All principal will be repaid in one balloon payment at the end of year 15. What is the net asset value of this project?