Ladd Snow Supplies is looking to acquire Eilers Winter Works for $8 million. Ladd expects the merger to provide incremental earnings of $200,000 in Year 1, with incremental earnings increasing by $50,000 per year through Year 8. In Year 9 and beyond, incremental earnings will continue to grow at 10% forever. Ladd has calculated the marginal cost of capital for this investment to be 15%. What is the horizon value at Year 7?

Group of answer choices

$13,000,000

$10,200,000

$12,100,000

The horizon value cannot be calculated at Year 7 because constant growth does not start until Year 9.

$11,000,000