Ariana, Incorporated, is considering a project that will result in initial after-tax cash savings of $5.9 million at the end of the first year, and these savings will grow at a rate of 3 percent per year, indefinitely. The firm has a target debt-equity ratio of .58, a cost of equity of 13.3 percent, and an after-tax cost of debt of 5.2 percent. The cost-saving proposal is somewhat riskier than the usual project the firm undertakes; management uses the subjective approach and applies an adjustment factor of +1 percent to the cost of capital for such risky projects.

A.) Calculate the required return for the project.

Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

B.) What is the maximum cost the company would be willing to pay for this project?

Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

Answer question B, Please.

Project required return	11.33%
Maximum to Pay	?