The debt will be progressively repaid over the project's life with $5 million per year to be paid in Years 1-3, this will then increase to $10.5 million per year in Years 4-6. An appropriate opportunity cost of capital is 12.5% and the applicable tax rate is 18% for AGL Energy given special government incentives on renewables technology a) What is the base-case NPV for this project? [2 marks b) What is the total amount of interest paid by AGL Enersy on this project? [1 mark] c) What is the total present value of the tax shields for AGL Energy? [1 mark] d) What is the adjusted present value (APV) for this project? Based on the APV, would this project be acceptable for AGL Energy? [2 marks] e) Suppose the tax incentives expire 3 years after the project commences and the tax rate goes up to 30% as is common for most Australian companies. How much would the APV change by? [2 marks] f) Explain what is the driver(s) of this change in the APV of this project for AGL Energy. [4 marks] g) This result implies that companies should use more debt to finance their projects. Do you agree with this statement or not? Discuss. (8 marks] The debt will be progressively repaid over the project's life with $5 million per year to be paid in Years 1-3, this will then increase to $10.5 million per year in Years 4-6. An appropriate opportunity cost of capital is 12.5% and the applicable tax rate is 18% for AGL Energy given special government incentives on renewables technology a) What is the base-case NPV for this project? [2 marks b) What is the total amount of interest paid by AGL Enersy on this project? [1 mark] c) What is the total present value of the tax shields for AGL Energy? [1 mark] d) What is the adjusted present value (APV) for this project? Based on the APV, would this project be acceptable for AGL Energy? [2 marks] e) Suppose the tax incentives expire 3 years after the project commences and the tax rate goes up to 30% as is common for most Australian companies. How much would the APV change by? [2 marks] f) Explain what is the driver(s) of this change in the APV of this project for AGL Energy. [4 marks] g) This result implies that companies should use more debt to finance their projects. Do you agree with this statement or not? Discuss. (8 marks]