A firm is considering an average-risk project with and IRR of 9%. The firm's cost of debt is 5%, its cost of equity is 12%, and its tax rate is 20%. The target debt ratio for the project, in market values is o.5. The firm should: (multiple choice)

1) accept the project only if it can be completely financed with equity

2) accept the project only if it can be completely financed with debt

3) accept the project regardless of the financing method

4) reject the project regardless of the financing method