Please FAST An all - equity firm has 20 million shares currently selling for $ 32.50 each . The firm plans to invest $ 100 million immediately in a project with the same business risk as the existing assets of the firm . The project is expected to generate $ 25 million of pre - tax earnings ( also equal to cash flows ) in perpetuity . The firm's current cost of capital is 12.5 % , and it pays a 40 % tax rate . The firm plans to borrow the amount needed to start the project , $ 100 million , by issuing bonds . The interest rate on those bonds or the firm's debt will be 8 % yearly . If the cost of equity remains unchanged after borrowing , what will be the NPV of the project ? please reply fast.