Problem 2.4. Shiraz Industries is considering borrowing $l00 million to fund a new project. The market is uncertain about the projects risk so Shiraz will have to pay a 6% interest rate on this loan. The actual risk of the loan is low so that the appropriate interest rate on loan given the risk of the project is 5%. The entire principal will be repaid after three years. The corporate tax rate is 20%. Determine the effect of the loan on the value of the project.