Your company has several running projects that were financed with various types of loans. It would like to start one more project, and finance the purchase of the production equipment when the project starts. The company would like to use the so$-$called "flowto$-$equity approach" to calculate the project's profitability. Select YES if the item needs to be calculated under this approach, and NO if it doesn't.

the NPV of the cash flows

the present value of the future cash flows using the cost of equity for the levered company as the discount rate

the levered cost of equity

today's value of the project's annual levered cash flows using the all$-$equity company's cost of equity as the discount rate

part of the initial cost of the project that is not covered by the loan