Pelix ASA has an investment beta at 1.3. Risk free intrest is 4%, and expected return on the marketportofolio is 11%. The tax rate i 27%, creditors and owners dosent pay tax. The company Pelix ASA thinks about investing in a project that is expected to give a yearly cash flow of 4 million nok after taxes for 3 years. The projects risk is expected to be the same as the companys. The investment costs 8 million and 40% is financed with loans. The debt cost is 5%(interest), and the loan is payed back in full at the end of three years.

a) What is the the net value of the investment is its financed with cash.

b) What is the projects adjusted present value.

c) What is the projects adjusted present value, if the company is exempt from paying taxes.