Question 17 (Lecture 10- Estimating the Cost of Capital and Lecture 11 - Capital Budgeting and Valuation with Leverage and Exchange Risk) XYZ Corp, has a stock price of $24 per share with 0.5 million shares outstanding. The company also has 4,000 bonds outstanding. The current price for each bond is $1,500. XYZ's excess cash is zero. The company has an equity beta of 2 and a debt beta of 0.5. Year FCF Assume that the risk-free interest rate is 2% and expected market risk premium is 6%. XYZ Inc. faces a tax rate of 30%. Suppose its management is considering a project that has the same risk and same financing mix as the firm itself. Given the following expected free cash flows of the project, the project's NPV is $ million. 0 -244 million

1 141 million 2 182 million 14 points Save Answer Instruction: Input ONLY your numerical answer in the unit of million dollars, NO S sign, NO comma sign. Round to the nearest two decimal places. E.g., if your answer is $18.7546 million then input 18.76, not 18,760,000