Sawtooth Machinery is considering a 4-year project to manufacture a new line of chainsaws. The project requires an investments of $760,000 and will generate $380,000 per year in earnings before interest, taxes, and depreciation (EBITDA) for the next four years. The project will require an investment in net working capital equal to 2% of the EBITDA in each of years 1-4. Following year 4, the company expects free cash flows to grow at a constant 3% per year. The tax rate is 35% and the cost of levered equity is 13%. Sawtooth will borrow 40% of the project value ay 6%. Debt will be paid down as shown in the following:

Year	0	1	2	3	4
Debt Outstanding	304,000	228,000	152,000	76,000	0

a)What are the unlevered cash flows in years 0 through year 4?

b)What is the terminal value in year 4?

c)What is the NVP of the project if it were all equity financed?

D)What is the NVP of the Interest tax shield? What is the AVP of the project?