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Hurry The ABC Corporation has a capital structure of 40% debt and 60% equity. The company's tax rate is 40% and considers taking up a

Hurry

The ABC Corporation has a capital structure of 40% debt and 60% equity. The company's tax rate is 40% and considers taking up a 90 million project, which generates perpetuity cash flows. Assumes that total expenses are 75% of revenue with no depreciation expense. The project is financed with 40% debt and 60% equity with a discount rate (WACC) of 10%. The cost of equity is 14% and before tax cost of debt is 8%. If the annual (before interest expenses) pretax cash flow of the project is $18 million, answer the follow questions (assuming that UM finances the project with 40% debt and 60% equity): [Note: show all detail calculation steps and use two decimal points for percentage (or numeric) in computations and answers.] (a) What is the NPV of the project? (b) i) What is the rate of return for debtors? ii) Do debtors get back their required rate of return?

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