Q17.25. Your firm is in a 40% combined federal and state marginal income tax bracket. Your annual income is $500,000 per year for two years. If you finance some project with a $1,300,000 mortgage at an interest rate of 8%, how much will Uncle Sam re- ceive? If you finance the project with cash, how much will Uncle Sam receive? If other equivalent firms are offering investors expected rates of return of 10%, what is the PV of the tax savings from financing the project with a mortgage?