Hourly Rate or Project Fee?

Hi--

I was recently contacted by a business I interned with when I was in college. (That was four years ago, and I now have an MFA in writing.) They want me to work on a project--they want me specifically, so I don't need to worry about trying to sell myself to them. That's done. I'm trying to decide whether I should charge them a project fee or an hourly fee.

The project is basically a short book on the history of the business. They are giving me a transcript of the CEO's recorded stories from his time (several decades) with the company, and they want me to transform it into something they can self-publish. I don't know yet whether they want to keep the first-person narration of the CEO or whether they want it in third person. Right now the transcript word count is about 23,000 words, and they expect the CEO to do another recording session.

I have not done a lot of freelance writing/editing yet, so setting rates is fairly new for me. I am unsure how many hours the project will take me--partly because I haven't done anything exactly like this before and partly because I don't know what the client will end up wanting in terms of revisions, how much meeting time will be necessary beyond my initial conference to discuss the project. I do think I will spend at least 30-40 hours total, but maybe I'm way underestimating.

Any advice on whether I should give an hourly rate or project rate? And if you would go with a project fee, how much might you charge? If I were to go with hourly and give them an estimate of how long I thought it would take, how would I give them a safe estimate, given that I'm unsure and that I don't want to go way over my estimate?

FWIW, the client is the largest employer in my hometown and has an annual revenue of $50-100 million.

Thanks in advance!