Problem $18-1$ NPV and APV

Benton is a rental car company that is trying to determine whether to add $25$ cars to its fleet. The company fully depreciates all its rental cars over four years using the straightline method. The new cars are expected to generate $$255,000$ per year in earnings before taxes and depreciation for four years. The company is entirely financed by equity and has a $25$ percent tax rate. The required return on the company's unlevered equity is $14$ percent and the new fleet will not change the risk of the company. The risk$-$free rate is $5$ percent.

a$.$ What is the maximum price that the company should be willing to pay for the new fleet of cars if it remains an all$-$equity company? $($Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$.$ Suppose the company can purchase the fleet of cars for $$625,000.$ Additionally, assume the company can issue $$370,000$ of four$-$year debt to finance the project at the risk$-$free rate of $5$ percent. All principal will be repaid in one balloon payment at the end of the fourth year. What is the APV of the project? $($Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

$\backslash$table$[[$a$.$ Maximum price,$],[$b$.$ APV,$]]$