Philips expects to invest $$18,500,000$ in new$/$plant equipment. The contract will last for

$10$ years, at which point it expects its plant equipment to have a salvage value of

$$7,000,000.$ They plan to finance this project using $65\%$ debt and $35\%$ equity. Their

investment banker advises there are transaction costs of $2\mathrm{.}0\%$ on debt and $11\mathrm{.}0\%$ on

equity. Phillips expects to increase its accounts receivable by $$1,500,000,$ its inventory

by $$4,000,000,$ and its accounts payable by $$2,500,000.$ It expects to sell $45,000$ units at

a price of $$275/$unit$,$ with variable cost per unit of $$165.$ It expects additional operating

costs each year of $$900,000.$ Phillips tax rate is $35\%$