Minajet plc is considering a project that will contribute $4$ million in free cash flows the first year, growing by $3\%$ per year thereafter. The project will cost $30$ million. Minajet has an equity cost of capital of $12\%$ and a debt cost of capital of $6\%.$ The firm maintains a constant debt$-$to$-$equity ratio of $50\%.$ Minajet$$s corporate tax rate is $21\%$; the tax rate on interest income is $24\%$; and the tax rate on equity income is $20\%.$

calculate the NPV of the project using both the Weighted Average Cost of

Capital $($WACC$)$ method and the Adjusted Present Value $($APV$)$ method.

b$)$ Suppose that Deltajet, a company operating in the same industry as

Minajet, is all equity financed. Deltajet has an equity cost of capital of $11\%$ and

a current market capitalization of $85$ million. The company$$s free cash flows

are expected to grow at $2\%$ per year forever. The management of the

company has decided to add debt for the first time to its capital structure and

to maintain a $25\%$ debt$-$to$-$value ratio going forward. Deltajet$$s corporate tax

rate is $21\%$; the tax rate on interest income is $24\%$; and the tax rate on equity

income is $20\%.$ If Deltajet$$s debt cost of capital is $6\%,$ what will Deltajet$$s

levered value be$?$