Problem $3(25$ points$)$ A the end of period $0,$ EUSTRO Industries has the following characteristics: Cost of debt $(\backslash ($ r$\_\{$D$\}\backslash ))=\backslash (10\backslash \%\backslash )$; Cost of equity $\backslash (\backslash$left$($r$\_\{$E$\}\backslash$right$)=15\backslash \%\backslash )$; Market value of equity $\backslash (($E$)=50\backslash )$ million; Market value of debt $($D$)=50$ million. The risk free rate $\backslash (\backslash$left$($r$\_\{$F$\}\backslash$right$)\backslash )$ within the economy is $\backslash (5\backslash \%\backslash ),$ the expected return on the market portfolio $\backslash (\backslash$left$($r$\_\{$M$\}\backslash$right$)\backslash )$ is $\backslash (12\backslash \%\backslash )$ and the tax rate is $\backslash (35\backslash \%\backslash ).$ a$)$ Compute the WACC of the company $(\backslash (\backslash$mathbf$\{2\}\backslash )$ points$).$ b$)$ The firm is considering a new project which has the same operating risk as the company. The financing of the project will not alter the leverage of the firm $($its equity$-$debt ratio$).$ The new project has the following expected free cash flow: $($Indication: the FCF of period $0$ is the investment cash flow, and the cash flow of period $5$ includes already the terminal value$)$ Could you help the CFO of EUSTRO in estimating the NPV associated with this new project? $(3$ points$)$ What is the corresponding expected return on asset for this project? $(2$ points$)$ c$)$ What is the unlevered beta $(\backslash (\backslash$beta$\_\{$u$\}\backslash ))$ of the firm? $(6$ points$)$ d$)$ A young assistant, who has followed a Corporate Finance course recently, brings to the attention of the CFO that the operating risk of the project might be slightly different from the operating risk of the firm. After doing some estimation using a sample of industry firms, he comes up with an unlevered Beta in the range of $0\mathrm{.}95$ and $1\mathrm{.}15$ for this project. What is the NPV range implied by this min and max unlevered Beta? $(5$ points$)$ e$)$ What is the exact value of the unlevered beta $\backslash (\backslash$left$(\backslash$beta$\_\{$u$\}\backslash$right$)\backslash )$ which leads to a break$-$even situation $($i$.$e$.,$ NPV $=0)?(7$ points$)$