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 discussed. The Excel table can be downloaded here. You should provide the missing information in the yellow marked cells. Looking over the spreadsheet, you realize that while all of the cash flow estimates are correct, your associate used the flowtoequity valuation method and discounted the cash flows using the companys equity cost of capital of 11%. However, the project's incremental leverage is very different from the company's historical debtequity ratio of 0.20: For this project, the company will instead borrow $80 million upfront and repay $20 million in year 2, $20 million in year 3, and $40 million in year 4. Thus the projects equity cost of capital is likely to be higher than the 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 calculator with you, and with any luck you can use a better method before the meeting starts. Assume an interest rate of 6.0% and a tax rate of 20.0%.

a. According to the FTE approach, what is the NPV to equity using an equity cost of capital of 11%? The NPVE is-------- $ million. (Round to two decimals)

b. What is the best estimate of the project's value from the information given? The project value is--------- $ million. (Round to two decimals)

Please help me !!!

0 3 10.0 - 4.0 2 10.0 - 4.0 6.0 -2.4 25.0 6.0 10.0 - 3.0 7.0 - 2.8 25.0 10.0 - 2.0 8.0 - 3.2 25.0 -2.4 25.0 EBIT Interest (5%) Earnings Before Tax Taxes Depreciation Cap Ex Additions to NWC Net New Debt FCFE NPV at 11% Equity Cost of Capital - 100.0 - 20.0 80.0 - 40.0 0.0 28.6 - 20.0 8.6 - 20.0 9.2 20.0 - 40.0 9.8 5.9