To calculate the net present value of a levered project, one can use the so-called "flow-to-equity approach". It requires calculating all the following EXCEPT:

Multiple Choice

• the levered cost of equity.

• the present value of the future cash flows by discounting them at the cost of equity for an all-equity firm.

• the dollar amount of the initial investment that is not financed with a loan.

• the project's net present value.

• the discounted value of the levered cash flows using the levered cost of equity as the discount rate.