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4- Consider a project of the Pearson Company. The timing and size of the incremental after-tax cash flows for an all-equity firm are $-1000, $260,$520,

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4- Consider a project of the Pearson Company. The timing and size of the incremental after-tax cash flows for an all-equity firm are $-1000, $260,$520, $510, $500 from year 0 to 4 respectively. The unlevered cost of equity is 29%. a Calculate the NPV? Should this project be accepted? b. The firm finances the project with $19500 debt at 7% with $100 after-tax flotation costs. Principal is repaid at $2500 per year with added interest. Pearson's tax rate is 45%. The net present value of the project under leverage? Now, Should this project be accepted

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