Fiera Corporation is evaluating a new project that costs $45,000.The project will be financed using 40% debt and 60% equity, thus maintaining the firms current debt-to-equity ratio.The firms stockholders have a required rate of return of 18.36%, and its bondholders expect a 10.68% rate of return.The project is expected to generate annual cash flows of $13,000 before taxes for the next two decades. Fiera Corporation is in the 36% tax bracket.

• Determine the firms weighted average cost of capital (WACC).
• Calculate the traditional net present value (NPV) of the project using the WACC.Should the project be undertaken?
• Using Modigliani and Millers Proposition II, determine the required return on unlevered equity.
• Use the adjusted present value (APV) method to determine whether or not the project should be undertaken.
• Use the flow-to-equity (FTE) method to calculate whether or not the project should be undertaken.