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Suppose Alcatel-Lucent has an equity cost of capital of 10%, market capitalization of $10.8 billion, and an enterprise value of $14.4 billion. Suppose Alcatel-Lucent's debt

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Suppose Alcatel-Lucent has an equity cost of capital of 10%, market capitalization of $10.8 billion, and an enterprise value of $14.4 billion. Suppose Alcatel-Lucent's debt cost of capital is 6.1% and its marginal tax rate is 35%. Suppose it is considering an expansion project with the following free cash flows: Year 0 1 2 3 FCF -100 50 100 70 Calculate the (a.) WACC, (b.) levered value of the project (VI), and (c.) NPV of the project (WACC Method)

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