Cavegate is considering investing $375 million to launch a new project. This project is expected to generate a free cash flow of $ 36 million per year permanently, and its unlevered cost of capital is 11.3%. Suppose the marginal corporate tax rate is 29%. To fund the investment, Cavegate will take on some debt permanently.

If the NPV of this project is $120 million, the permanent debt that Cavegate will take on to fund the investment is closest to:

a.

$608.33 million

b.

$730.00 million

c.

$547.50 million

d.

$669.16 million