15c. Engineering Finance. Please provide complete and correct solution done on computer or by hand with mathematical proof/explanation to all questions. Please, emphasis on complete and correct solution. The answers will be verified. This is all the information provided. Thank you very much.

The Bunsen Gas Company has just finished constructing a natural gas plant in, and for, the Republic of Frigideria. The final payment of $2.5 million to Bunsen by the government will be made one year hence, after Bunsen trains the local people to operate the new plant. However, there is a good chance (maybe 30 percent) of a coup detat, in which case it is highly unlikely that any new government would honor the previous governments obligations. Rather than use the companys usual 15 percent cost of capital, the management of Bunsen Gas Company decides to account for the risk of a coup detat by discounting the final payment at 45 percent.

c) How much is the final payment of $2.5 million worth to Bunsen Gas Company if the risk of a coup detat was accounted for in a way other than including it in the discount rate?