PC Company manufactures photo equipment.  It is currently at its
target debt-equity ratio of 1-2.  It is considering building a new $40
million manufacturing plant.  This new plant is expected to generate
after-tax cash flows of $5.5 million in the form of a perpetuity. 
There are three financing options:

1.	A new issue of common stock.  The flotation costs of the new common
stock would be 8% of the amount raised.  The required return on the
company?s new equity is 18%.

2.	A new issue of 20-year bonds.  The flotation costs of the new bonds
would be 3% of the proceeds.  If the company issues these new bonds at
an annual coupon rate of 9%, they will sell at par.

3.	Increased use of accounts payable financing.  Because this
financing is part of the company?s ongoing daily business, it has no
flotation costs and the company assigns it a cost that is the same as
the overall firm WACC.  Management has a target ration of accounts
payable to long-term debt of .25 (Assume no difference between the
pretax and after-tax accounts payable cost.)

What is the NPV of the new plant?  Assume that PC has a 35% tax rate.