$$ A competitor approached you about selling an asphalt plant. After

careful due diligence, you estimate that the plant may generate

$$450,000$ OCF per year for $10$ years and a terminal resale value

$($after tax$)$ of $$3$million afterward.

$$ You have an old plant in the same region that generates $$190,000$

OCF per year. The plant can operate economically for $6$ more

years, after which you plan to close it and sell the land for $$1$

million after tax. If you decide to buy the competitor$$s plant, you

will close this old plant and sell the land now.

$$ In addition, buying the competitor$$s plant lowers the material cost

of your paving division by $$80,000$ per year.

$$ What is the highest price you can pay for the competitor$$s plant if

your WACC is $6\%.$ Tax rate is $21\%.$