You are looking at a project in Japan with the following characteristics. The local beta of the project is 1.2, the US beta of the project is .8. The risk-free rate in Japan is 1%, and the risk-free rate in the US is 3.5% The market risk premium is 7% for both countries. You believe that over the 20-year life of this project, UIP will approximately hold. The initial investment is $10 million, and the returns will be 1.2 million dollars per year. Tax rates are 35% for the US and Japan, and you can finance 50% of the initial cost of the project with debt, at a 7% rate in the US or a 5% rate in Japan.

Do you want to undertake the project and how do you want to finance it?