20. Brite Ltd. is considering a project unrelated to its existing business. The firm collected the following information of similar firms in the industry to determine the risk of the project: Average debt-equity: 0.8:1: average equity beta: 1.6 and average cost of debt: 12 per cent. The project's target debt-equity is 0.5:1. The risk-free rate is 6 per cent and the market risk premium is 9 per cent. Brite's corporate tax rate is 35 per cent. The initial outlay on project is estimated as 750 crore. (i) The expected post-tax FCF's at the end of the first year are 5 crore which will remain constant thereafter for an indefinite period. Should the investment be made? (i) Suppose that the expected post-tax FCFs of 5 crore at the end of the first year will grow at 8 per cent per year until the end of sixth year and will remain constant thereafter for an indefinite period. What is the value of investment? (ii) Suppose that the expected post-tax FCPs of t5 crore at the end of the first year will grow at 6 per cent per year until the end of sixth year and at 2 per cent there after for an an indefinite period. What is the value of investment?