A project requires initial asset investment of $2 million. The asset will last for 7 years, and will be depreciated for tax purposes at the CCA rate of 30%. The required return on this project is 15%, and the marginal corporate tax rate is 32%. Assuming that the asset will have a salvage value of $100,000 at the end of Year 7, what is the present value of the CCA tax shields from this project?

a.398840.58

b.406860.57

c.390820.59

d.389617.59

e.408063.57