Suppose you are considering a project that is expected to generate Net Cash Flows of $175,000 in each of the first 8 years, and then $250,000 in the last 12 years (20 years in total). You are considering two different capital structures for funding the project. The first option (OPTION A) has a WACC of 6.5%, while the second (OPTION B) has a WACC of 8.2%.

Which capital structure is better and by how much? Show by comparing Net Present Values (NPV).

Better Option ________________

By how much? ________________