Mikonos Corp. is planning to invest in a manufacturing plant with an initial cost of $105 million (which includes $5 million of initial net working capital).

The project will be financed with $40 million debt and the rest equity. The after tax residual value of the plant is expected to be $100 million at the end of year 20.

Mikonos has an unlevered cost of capital of 10%, a cost of debt of 5% and a tax rate of 25%. The 20-year Treasury bond rate is 4% (assume is riskless).

What is the residual value of the plant at todays price?

Select one:

a. $14,864,362.80

b. $37,688,848.29

c. $45,638,694.62

d. $28,266,711.22

e. $11,148,272.10