Avco is investing $150 million in a new project. To finance this investment the company will issue $150 million of new debt in the form of a 5-year bond. The bond will be repaid in one bullet payment after 5 years. The cost of debt associated with this bond is 5% and the marginal corporate tax rate of Avco is 35%. Using the APV method, what is the present value of the tax shields associated with this project? Select one.

	I.	$11.36 million
	II.	$52.50 million
	III.	$2.50 million
	IV.	$2.63 million
	V.	$21.11 million