Goodyear is thinking of divesting one of the plants. The plant will generate free cash flows (FCF) of $3.8 million at the end of the first year and the cash flows will grow at 3%. The plant is financed with a debt of 50 million which is expected to remain constant. Goodyear has an equity cost of capital of 10% and a debt cost of capital of 6% and a marginal tax rate of 40%. Personal tax rates for marginal equity and debt investors are 10% and 15%. There is a 10% chance that the firm will default in the next period. In case it defaults, the cost of default (after adjusting for appropriate discount rate) is 20 million. Further the present value of the net agency cost of the $50 million debt is estimated to be 5 million. If the plant has an average risk similar to the whole firm, value the plant using the APV method. Assume a leverage ratio of 0.5.

Group of answer choices 93 91 87 83