2019SD,Q1: discount rate

For APV, the base case NPV is calculated by discounting at the ungeared cost of equity (the cost of equity had there been no gearing). The effect of the debt is calculated by discounting the tax saving on the interest at either the return on debt or at the risk free rate (there are arguments for using each of the rates and the examiner always accepts either). All of this is explained in my free lectures on APV !!