PROBLEM 1 (20 POINTS) Bil-A-Bong Enterprises is considering taking on a new project. The project itself requires a net investment of $5 million and is expected to generate net earnings of $1 million per year growing at 2% in perpetuity. The object of the proposed project is to make snowboards. Swoosh, the dominant player in the industry, is a single product company, making snowboards exclusively. Swoosh is all-equity financed. t has a beta of 0.75. The risk-free rate is 10% and the market risk premium is 10%. Assume that Bil-A-Bong can borrow at the risk-free rate, and that both firms face a corporate tax rate of 34% (a) What is the NPV of the project if it is all equity financed? (3 POINTS) (b) What is the NPV of the project if Bil-A-Bong ises $4 million annual coupon debt due in 5 years to make the investment? (5 POINTS)