CHAPTER 18VALUATION AND CAPITAL BUDGETING FOR THE LEVERED FIRMAnswers to Concepts Review and Critical Thinking Questions1.APV is equal to the NPV of the project (i.e. the value of the project for an unlevered firm) plus the NPV of financing side effects.2.The WACC is based on a target debt level while the APV is based on the amount of debt.3.FTE uses levered cash flow and other methods use unlevered cash flow.4.The WACC method does not explicitly include the interest cash
