Aardvark Industries is considering a project that will generate the following free cash flows:

Year

$0$

$1$

$2$

$3$

Free Cash Flows

$($$$200)$

$$100$

$$80$

$$60$

You are also provided with the following market value balance sheet and information regarding Aardvark's cost of capital:

Assets

Liabilities

Cost of Capital

Cash

$0$

Debt

$400$

Debt

$7\%$

Other Assets

$1000$

Equity

$600$

Equity

$12\%$

$\backslash$tau c

$35\%$

Suppose that to fund this new project, Aardvark borrows $$150$ with the principal to be paid in three equal installments at the end each year. The levered value of Aardvark's new project is closest to:

Question $5$Select one:

a$.$

$$208\mathrm{.}39$

b$.$

$$202\mathrm{.}10$

c$.$

$$207\mathrm{.}36$

d$.$

$$210\mathrm{.}75$