You are on your way to an important budget meeting. In the elevator, you review the project valuation analysis you had your summer associate prepare for one of the projects to be decussed Looking over the spreadsheet, you realize that while all of the cash flow estimates are correct, your associate used the flow-to-equity valuation method and discounted the cash flows ang the company's equity cost of capital of 11%. However, the projects incrementat leverage is very different from the company's historia debt equity ratio of 0 20 For this project, the company wil instead borrow $80 milion upfront and repay $20 million in year 2, $20 million in yow 3 and 540 million in your 4.Thus the project's equity cost of capital is key to be Ngher than fire's not constant over time-invalidating your associate's calculation Clearly the FTE approach is not the best way to analyze this project. Fortunately, you have your caleator with you, and with any luck you can use a better method before the meeting to 1. What is the present value of the interest tax shield associated with this project t. What are the free cash flow of the project c. Who is the best estimate of the project's value from the information given? cu What is the present value of the interest tax thield sociated with this project The procent value of the Interest to child asociated with this project is 3 million (Round to ona decimal place b. What are the tree cash flows of the project? There cash flows of the project are: Round of answers to one decimal place) You are on your way to an important budget meeting. In the elevator, you review the project valuation analysis you had your summer associate prepare for one of the GE a. What is the present value of the interest tax shield associated with this project? The present value of the interest tax shield associated with this project is $1 million (Round to one decimal place.) b. What are the free cash flows of the project? The free cash flows of the project are: (Round all answers to one decimal place) 1 2 FCF (5 million) 0 3 c. What is the best estimate of the project's value from the information given? The best estimate of the project's value from the information given will be $ million (Round to one decimal place.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) 0 ($ million) EBIT Interest (5%) Earnings Before Tax Taxes (41%) Depreciation Cap Ex Additions to NWC Net New Debt FCFE NPV at 11% Equity Cost of Capital 1 9.8 - 4.0 5.8 - 2.4 25.0 2 9.5 -4.0 5.5 -2.3 25.0 3 10.4 -3.0 7.4 -3.0 25.0 4 10.4 -2.0 8.4 -3.4 25.0 - 100.0 - 20.0 80.0 - 40.0 0.0 28.4 - 20.0 8.2 - 20.0 9.4 20.0 - 40.0 10.0 5.7 Print Done