Assume the free cash flows from the BBC Corp. project are given below. Assume the weight of the debt, wd, is 54%, the cost of debt, rd = 6%, the tax rate = 35%, ru = 8% and 500 shares of stock are outstanding.

wd =
rd =
Tc =
Ru =
re =
rwacc =
Shares outstanding =

1) The debt capacity, Dt, in year 3 is closest to:

Year	0	1	2	3	4
FCF	$(50,000)	$19,075	$25,051	$26,705	$28,491
Disc. Rate, rwacc=
PV=
Dt=

2) The present value of the interest tax shield is closest to:

Interest=
Tax Shield=
PV of Tax Shield=

3) The interest tax shield, ITS, stated as a percentage is closest to:

ITS% =

4) The unlevered value of the project, Vu is closest to:

Vu=

5) The levered value of the project, VL is closest to:

VL =

6) The unlevered price per share is closest to:

Price, Unlevered =

7) The levered price per share is closest to:

Price, Levered=

8) The free cash flow to equity in year 3 is closest to:

Year	0	1	2	3	4
FCF=
After Tax Interest=
Debt Flows=
Flows to Equity=
NPV=
PV=

9) What are your recommendations for 1) purchasing the machine and 2) financing the project?