You are considering a new project in Mexico. At first, you plan on financing all with equity. You estimate a beta for your project of 1.3 , that the risk premium is 7%, and that the risk-free rate is 1%. If the initial cost is $10 million dollars. If the project will provide $900,000 per year in after-tax cash flows forever, what is the APV? Approximately $1.2 million. Approximately $2.4 million. Approximately $3.6 million. Greater than $3.7 million. None of the above. QUESTION 7 Similar setup as above: You are considering a new project in Mexico. At first, you plan on financing all with equity. You estimate a beta for your project of 1.3 , that the risk premium is 7%, and that the risk-free rate is 1%. The initial cost is $10 million dollars, and the project provide $900,000 in after-tax cash flows per year forever. You face a 21% tax rate. Mark all of the below that are true. If you finance with 50% debt, that will increase your APV. If you finance with 50% debt, that will decrease your APV. Borrowing in Mexico can decrease your foreign exchange risk. Borrowing in the U.S. and doing a swap would be similar to borrowing in Mexico but could potentially lower your rate. Financing at a higher rate is more advantageous for your company as it lowers your APV