Answer:
The APV of a project will be "$88,958.52".
Step-by-step explanation:
To calculate the APV (Adjusted Present Value):
NPV of a Equity Financing =
![[-Investment+((Aftertax \ Returns \ year1)/((1+Rate)))+((Aftertax \ Return \ year2)/((1+Rate)^2))]](https://img.qammunity.org/2021/formulas/business/college/45ql6208n9a51jte3x46obrzickxbbtq8i.png)
On putting the values in the above formula, we get
=
![[-1020000+((620000)/(1+14 \ percent))+((720000)/(1+14 \ percent^2))]](https://img.qammunity.org/2021/formulas/business/college/6lfmr3upanwzwcuoqyuhv4gyg0f1tdjbic.png)
=
![[-1020000+543859.65+554016.62]](https://img.qammunity.org/2021/formulas/business/college/e4q1d6gjci0d57x0y8qh6snfy3ix5xr6v1.png)
= $

Present value:
When $320000 is funded with department to be reimbursed in two installments of I, we provide
⇒ $320000 =

⇒
= $

During first year of a installment,
[320000×0.10] = $32000 is of concern interest as well as the remaining
$152380.95 ($184380.95-$32000) seems to be of principal repayment which leaves $167619.05 ($320000-$152380.95) as a debt for the next year.
Now,
APV =
![[NPV \ of \ Financial+Total \ Tax \ Shield]](https://img.qammunity.org/2021/formulas/business/college/43xahueod4sk4ami5tin3ufkkguuxgf51c.png)
On putting the values in the above formula, we get
⇒ =
![[77878.27+11082.25]](https://img.qammunity.org/2021/formulas/business/college/a6m0wqikzcwvcnob946dpatv48fmiojyev.png)
⇒ = $
