Triad Corporation has established a joint venture with Tobacco Road Construction,

Incorporated, to build a toll road in North Carolina. The initial investment in paving

equipment is $$80\mathrm{.}4$ million. The equipment will be fully depreciated using the straight$-$

line method over its economic life of five years. Earnings before interest, taxes, and

depreciation collected from the toll road are projected to be $$12\mathrm{.}2$ million per annum for

$20$ years starting from the end of the first year. The corporate tax rate is $24$ percent. The

required rate of return for the project under all$-$equity financing is $13$ percent. The pretax

cost of debt for the joint partnership is $8\mathrm{.}9$ percent. To encourage investment in the

country's infrastructure, the U$.$S$.$ government will subsidize the project with a $$25\mathrm{.}4$

million, $15-$year loan at an interest rate of $5\mathrm{.}4$ percent per year. All principal will be repaid

in one balloon payment at the end of Year $15.$ The company issued subsidized debt

instead of issuing debt at the terms it normally would. Assume the face amount and

maturity of the debt issue are the same. What is the gain or loss from subsidized

debt? $($Do not round intermediate calculations and enter your answer in dollars, not

millions of dollars, rounded to $2$ decimal places, e$.$g$.,1,234,567\mathrm{.}89)$