Exhibit A: Cost of capital information

Interest Rates: January 2018
Government Bonds			Market Risk Premium
1-year	3.5%		Historical Average	6.0%
Corporate Bond Information
Par Value	$1,000
Market Value	$986
Coupon Rate	5.0%
Average Life	12 years
Longwood Financial Data
Balance Sheet (in millions)			Other Information
Long-term Debt	2,500		Beta	1.10
Common Equity	500
Retained Earnings	2,000
Per-share Data
Shares outstanding	500 million
Book Value per share	$5.00
Recent Share Price	$24

1. List the income/costs associated with this project. Categorize each cost/benefit into what component of FCF it belongs to. Is the cost/benefit short or long-term?