Firm Bullcat is an all - equity firm that has expected free cash flows of $10M per year in perpetuity starting next year.The cost of capital for this unlevered firm is 10 percent. The firm has 5million shares outstanding. Assume a perfect market.

a) Construct the current market value balance sheet.

in million dollars	A		E+L
cash	0	Debt	0
exisiting asset		Equity
Total Asset		Total E=L

b) What is the current share price of Bullcat stock?

Firm Bullcat is also considering a new project. The new project requires an initial investment of $8M and will generate additional cash flow of $1M per year in perpetuity. Assume that the new project is similar to Bullcats existing projects.

c) What is the NPV of the new project?