2. Two auto parts manufacturers have agreed to merge. By streamlining operations, the merger is projected to generate pretax cost savings of $63 million in the first year, $118 million in the second year, $183 million in the third year, and thereafter growing at the rate of inflation. To achieve these cost savings an investment of $480 million (not tax deductible) must be made at the outset. Sales of redundant equipment and property are expected to bring in pretax gains (difference between market value of assets sold and book value of assets sold, which is taxed as a gain) of $63 million in the first year and $48 million in the second year. The merged company's cost of capital is forecast at 6 percent. Inflation is 2.5 percent. Assume a marginal tax rate of 35 percent Using merged company's cost of capital as the discount rate, what is the present value of savings