4. Afex Engineering Company has cost of equity of 17%, cost of debt of 12% and debt ratio of 40%. The company is considering an investment project in its existing line of business. The project will need a cash outlay of $120 million. It is expected to generate annual EBDIT of $35 million for 8 years. The project will require $3 million each year for net working capital and capital expenditure. Afex will be able to borrow 50% of the project's cost from a financial institution at a rate of 12% p.a., and the loan will be repaid in five equal instalments after 3 years. Corporate tax rate is 30%, and assuming straight-line depreciation for tax purposes, with zero terminal value of the project; i. Determine whether Afex should undertake the project. ii. Due to the company's credit worthiness, suppose the management of Afex is able to negotiate for a lower interest rate from the financial institution of 10% p.a. What effect would this have on the firm's NPV