Consider a project to produce solar water heaters. It requires a $10 million investment and offers a level after-tax cash flow of $1.73 million per year for 10 years. The opportunity cost of capital is 11.75%, which reflects the projects business risk.

a) Suppose the project is financed with $7 million of debt and $3 million of equity. The interest rate is 7.75% and the marginal tax rate is 21%. An equal amount of the debt will be repaid in each year of the project's life. Calculate APV.

Note: Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations. Round your answer to the nearest whole number.

b) If the firm incurs issue costs of $560,000 to raise the $3 million of required equity, what will be the APV?

Note: Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations. Round your answer to the nearest whole number. Negative amount should be indicated by a minus sign.