16.16. Atways Industries is involved in two similar mining projects. The Wyoming project was financed through the firm’s internal cash flows and appears as an asset on its balance sheet. The Montana project was set up as a wholly owned subsidiary of Atways. The subsidiary was financed 20 percent with equity provided by Atways and 80 percent with non-recourse debt.

How do the different ways that these projects were originally financed and structured affect future investment and operating decisions?