Consider a project of the Charlie Company, the timing and size of the incremental after$-$tax cash flows $($for an all$-$equity firm$)$ are shown below in

millions:

CFO$=-$$$990$;$C01=$$$125,CO=$$$250$;$C03=$$$375$;$C04=$$$500$

The firm's tax rate is $21$ percent; the firm's bonds trade with a yield to maturity of $8$ percent; the current and target debt$-$equity ratio is $2$ ; if the

firm were financed entirely with equity, the required return would be $10$ percent. Using the weighted average cost of capital methodology, what

is the NPV$?$ Hint: use $r_{-}L=r_{-}u+(\frac{D}{E})(r_{-}u-r_{-}d)(1-t),$ and then find WACC.

$-10\mathrm{.}6854$

$10\mathrm{.}6854$

$-7\mathrm{.}5674$

$7\mathrm{.}5674$

Question $7$

Use the data from Q$6,$ what is the levered incremental cash flow for year $2?$ Hint, first find original debt level, and find tax sa

$-$Use the data from Q$6$ and Q$7,$ what is the unlevered cash flow for year $4?$

$$458\mathrm{.}288$m

$-$$$458\mathrm{.}288$m

$-$$$201\mathrm{.}712$m

$$201\mathrm{.}712$m

$-$Use data from Q$6$ through Q$9,$ what is the adjusted present value, APV, of an all$-$equity firm using $10\%$ as the discount rate? Ans.: $$\_\_\_\_\_\_\_$m$.$

Group of answer choices

$30\mathrm{.}487$

$40\mathrm{.}487$

$20\mathrm{.}487$

$25\mathrm{.}487$