I just need help with #2. Please explain well, thank you!

We usually work in excel for this too

J00 8100,000 8I iVe-year, 8 percent debt to finance the project. All principal will be repaid in one balloon payment at the end of the fifth year. What is the adjusted present value (APV) of the project? 2.) APV Gemini, Inc., an all-equity firm, is considering a $1.9 million investment that will be depreciated according to the straight-line method over its four-year life. The project is expected to generate earnings before taxes and depreciation of $685,000 per year for four years. The investment will not change the risk level of the firm. The company can obtain a four-year, 9.5 percent loan to finance the project from a local bank. All princi- pal will be repaid in one balloon payment at the end of the fourth year. Fhe bank will charge the firm $28,000 in flotation fees, which will be amortized over the four-year life of the loan. If the company financed the project entirely with equity, the firm's cost of capital would be 13 percent. The corporate tax rate is 30 percent. Using the adjusted present value method, determine whether the company should undertake the project. 3 Flow to Equity Milano Pirn Club