Suppose a firm currently has $12,000,000 in debt outstanding with a 10.00% interest rate. The terms of the loan requires the firm to repay the principal in equal installments each year for 3 years until the entire loan has been repaid. Interest is paid at the end of each year based on the outstanding principal for that year. Assuming the marginal tax rate is 40.00%, what is the present value of the interest tax shield from this debt assuming that the interest tax shields have the same risk as the loan (i.e. the appropriate discount rate is the same as the cost of debt)?

$821,037

$4,800,000

$1,600,000

$960,000