You are a consultant who has been hired to evaluate a new product line for Markum Enterprises. The upfront investment required to launch the product line is 8 million. The product will generate free cash flow of 0.70 million the first year, and this free cash flow is expected to grow at a rate of 3% per year. Markum has an equity cost of capital of 10.9%, a debt cost of capital of 7.46% , and a tax rate of 32%. Markum maintains a debt-equity ratio of 0.40 .

a. What is the NPV of the new product line (including any tax shields from leverage)?

The NPV of the new product line is $ million. (Round to two decimal places.)

b. How much debt will Markum initially take on as a result of launching this product line?

Debt will be$ million.(Round to two decimal places.)

C. The amount of the product line's value that is attributable to the present value of interest tax shields is $ million.(Round to two decimal places.)