Question $9$

Zeta Inc. is considering a $$45$ million project. The company's CFO determined that the unlevered after$-$tax $($all$-$equity$)$ cash flow is $$3\mathrm{.}1$ million per year in perpetuity. Zeta Inc.$\text{'}$s pretax cost of debt is $6\mathrm{.}9\%,$ and its cost of equity is $10\mathrm{.}8\%.$ The company's optimal debt$-$to$-$value ratio is $0\mathrm{.}8.$ The project has the same risk as Zeta's current business. The CFO decide to apply the optimal capital structure to this project. The corporate tax rate is $34\%.$

a$)$ Find the the NPV of this project under the weighted average cost of capital $($WACC$)$ method of valuation. Should the company invest in this project?

b$)$ Suppose the CFO of the company decides to use all equity to finance this project, will your conclusion in the previous part change?