Answer:
Using the flow-equity method of valuation the borrowed is $67600,option B.
Explanation:
In order to determine the amount borrowed in executing the project, we make use of the below formula which shows that we are working backwards.
Amount borrowed=present value of cash inflows-levered cash flows
present value of cash inflows=net present value+initial investment
present value of cash inflows=$157000+$640000
present value of cash inflows=$797000
levered cash flows=$729400
Amount borrowed=$797000-$729400
amount borrowed =$67600
