MG Inc. has signed a $20-$year contract to produce modems for a local ISP. The production requires a

machine that costs $$240,000.$ The CCA rate is $20\%$ and the salvage value is $$3,600.$ The annual revenues

and expenses are expected to be $$110,000$ and $$75,000$ respectively. OMG finances the machine with a

$$60,000$ loan that has subsidized interest rate of $3\%.$ OMG is required to repay $$20,000$ at year $5$ and the

remaining balance at year $20.$ OMG$$s cost of debt is $6\%$ and the corporate tax rate is $30\%.$

$($a$)$ If the cost of unlevered equity is $10\%$ and the machine is the only asset in the class, calculate the

NPV using the APV approach.

$($b$)$ If the cost of equity is $11\%$ and the asset class remains open with positive UCC, calculate the NPV

using the FTE approach.

$($c$)$ If the weighted average cost of capital is $9\%$ and the machine is the only asset in the asset class,

calculate the NPV of the project using the WACC approach.