[Q18-Q23] You are evaluating a 1-year project that is in line with the firms existing business. Specifically, this new project requires an investment of $1,200 in free cash flow today, but will generate $1,600 one year from today. The project will be partially financed with a 1-year maturity debt whose face value is $200 and interest rate is 10%.

Suppose that you estimated the cost of equity as 20%, based on the firms stock data. However, you were not able to estimate the cost of debt because your firms total debt consists of long-term debt, short-term debt, investment grade debt, and debt with different levels of collateral. Assume that the corporate tax rate is 30%.

Under the FTE approach, the NPV of the project is obtained by discounting future FCFE using the _______.

A.	Cost of assets
	B.	Cost of unlevered equity
	C.	Weighted average cost of capital
	D.	Cost of levered equity

What is the NPV of this project?

	A.	$21
	B.	$14
	C.	$80
	D.	$155