I have a question about part c of the question below. I was able to figure out a and b. I was also able to calculate the Vl for year 0 and year 3 in order to calculate the Debt Capacity for years 0 and 3.

My question is how to you figure out the VL for years 1 and 2 in order to use that figure in the formula to compute the Debt Capacity for years 1 and 2.

Suppose Alcatel-Lucent has an equity cost of capital of 9.5 %, market capitalization of $ 10.22 billion, and an enterprise value of $14.0 billion with a debt cost of capital of 6.8% and its marginal tax rate is 34%.

a. What is Alcatel-Lucent's WACC?

b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the following expected free cash flows? Yr- 0,1,2,3 FCF ($ million)(100), 46, 104, 75

c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)?