$1.(45$ points$)$ Suppose that H$-$E$-$B$,$ a Texas$-$based supermarket chain, is an all$-$equity firm whose beta is $1\mathrm{.}6.$ Assume that the CAPM holds. The risk$-$free rate is $2\%$ and expected return on the market is $7\%.($a$)(6$ points$)$ What is the cost of capital for H$-$E$-$B $($ie the discount rate for the entire firm$)?59$ PM$($b$)(9$ points$)$ H$-$E$-$B is considering opening a new store in Fort WorthU.S$.$ to$0)$This project is in the same line of business as H$-$E$-$B$\text{'}$s existing projects.Today, the project requires $$160$M as an initial investment.For each year, this store will generate $($i$)$ $$100$M with a $20\%$ chance, $()$ $$60$M with a $50\%$ chance, and$()$ $$20$M with a $30\%$ chance. The cash flow stream from this store will start next year and last foreverWhat is the expected cash flow, C$,$ from this project each year? What is the NPV of this project $($Hint: Apply the perpetuity formula using C$)?$ Should H$-$E$-$B accept this project?