Problem 2.2. Suzhou Corp. has $60 million in equity, $20 million in debt, and no excess cash. Its cost of equity is 8% and cost of debt is 5%. The corporate tax rate is 20%. Suzhou is considering a new project that requires initial investment of $8 million and will result in free cash flows of $4 million after one year, $5 million after two years, and finally $3 million after three years. Assuming that the project has the same risk as Suzhous existing business and the firm wants to maintain its debt to equity ratio, calculate the debt capacity of Suzhous new project (how much debt it will have) now, after one year, and after two years