2. Consider an investment lasting for three years yielding the following cashflows. = 1 2 3 t Ct 0 -10 5 5 5 The cost of capital for an all-equity firm is 10%. Suppose that this investment project is to be financed by borrowing 50 % of the investment at 5%. The loan is to be paid pack in full after 3 years. The current corporate tax rate is 30%. Compute the value of the tax shield using the APV method. Would you recommend for the firm to leverage the investment? (10 pts). 2. Consider an investment lasting for three years yielding the following cashflows. = 1 2 3 t Ct 0 -10 5 5 5 The cost of capital for an all-equity firm is 10%. Suppose that this investment project is to be financed by borrowing 50 % of the investment at 5%. The loan is to be paid pack in full after 3 years. The current corporate tax rate is 30%. Compute the value of the tax shield using the APV method. Would you recommend for the firm to leverage the investment? (10 pts)