An all$-$equity financed company has a cost of capital of $10$ percent. It owns one asset: a mine capable of generating $$103$ million in free

cash flow every year for five years, at which time it will be abandoned. A buyout firm proposes to purchase the company for $$380$

million financed with $$330$ million in compound interest debt to be repaid in five, equal, end$-$of$-$year payments and carrying an interest

rate of $6\mathrm{.}5$ percent.

a$.$ Calculate the annual debt$-$service payments required on the debt.

b$.$ Ignoring taxes, estimate the rate of return to the buyout firm on the acquisition after debt service.

Note: Round your answers to $1$ decimal place.