Sawtooth machinery is considering a 4-year project to manufacture a new line of chainsaws. The project requires an investment of $760,000 and will generate $380,000 per year in earnings before interest, taxes, and depreciation (EBITDA) for the next four years. The investment will be depreciated straight line to zero over four years. In year 4, the company expects to sell the project for $4 million. The tax rate is 35%, and cost of levered equity is 13%. Sawtooth will borrow 40% of the project value and 6% in debt outstanding each year is shown on the table below:

	0	1	2	3	4
Debt outstanding	304000	228000	152000	76000	0

1. Use the MM Proposition II with taxes to calculate the cost of unlevered equity
2. What is the NPV of debt financing?
3. What are the unlevered project cash flows in years 0 to 4?

Please show all work & formulas