Question 8 (1 point) Saved I am financing a $1 million dollar project with equal amounts of equity and non- recourse debt (i.e., project finance). This project generates $50,000 of free cash flow to equity every period in perpetuity. The comps have an average asset beta of 0.60. Assume a debt beta of 25, a market risk premium of 5.00%, and a risk-free rate of 2.50%. Further assume that CAPM holds. Using an iterative, project-finance-based approach for project value, which of the following is closest to your final estimate of the project's equity? $500,000 $650,000 There is not enough information to answer the question. $750,000 $400,000 Question 9 (1 point) Saved Which of the following is a legitimate reason for firms to use a hurdle rate rather than an estimated WACC to evaluate projects? To more closely represent true opportunity costs for a firm that has to reject positive-NPV projects due to financial constraints. To provide a safety margin in case of estimation error in the WACC. Both of the above reasons are valid. Firms only use a hurdle rate different from the WACC out of ignorance of financial theory. Firms never use a "hurdle rate