Sailcloth Inc. keeps a zero-beta yet risky debt and a wacc of 15%. The company also keeps a constant debt-to-equity ratio equal to 0.7. The risk free rate is 1.50%. Sailcloth is thinking to start a new project that requires a $200,000,000 initial investment and will be 10 years long. The project will be managed separately from the rest of the company, it will have an initial debt- to equity ratio of 1, and the debt level will be kept constant through the life of the project. Tne assets of this new project are as risky as the other assets of the firm. The cost of debt for the new project is the same as the cost of the other debt issued by the company. The assets of the project will be depreciated straight line through the life of the project, and the present value of depreciation tax benefits for the first year is 4,799,170. The corporate tax rate is 25%. Assuming that the annual expected net income from the project is $56,534,000 Question 8 [21 points] 1) What is the return on unlevered equity for the new project? (5 points 2) What is the unlevered cash flow Yom the project? (5 points] 3) What is the NPV of the project? (11 points) Sailcloth Inc. keeps a zero-beta yet risky debt and a wacc of 15%. The company also keeps a constant debt-to-equity ratio equal to 0.7. The risk free rate is 1.50%. Sailcloth is thinking to start a new project that requires a $200,000,000 initial investment and will be 10 years long. The project will be managed separately from the rest of the company, it will have an initial debt- to equity ratio of 1, and the debt level will be kept constant through the life of the project. Tne assets of this new project are as risky as the other assets of the firm. The cost of debt for the new project is the same as the cost of the other debt issued by the company. The assets of the project will be depreciated straight line through the life of the project, and the present value of depreciation tax benefits for the first year is 4,799,170. The corporate tax rate is 25%. Assuming that the annual expected net income from the project is $56,534,000 Question 8 [21 points] 1) What is the return on unlevered equity for the new project? (5 points 2) What is the unlevered cash flow Yom the project? (5 points] 3) What is the NPV of the project? (11 points)