2 : 5 Use the following information for questions 1 and 2 BoeBus Air is considering increasing production of the 525 Airliner at their South Carolina assembly plant. You have been provided the following pieces of Information The expansion will require the purchase of machinery costing $50.000.000 The firm has spent $250,000 to train workers to use the new machinery The sales from this project will be $18 million per year. Variable costs will increase by $3.6 million per year. The company uses straight-line depreciation. The project has an economic life of 20 years, and the machinery will have a book value of $5,000,000. At the end of the project's life, the machine will be sold for $4,000,000 . Because of the project the company will need additional working capital of $3.500,000 which can be liquidated at the end of 20 years. BB's stock price is $34.25. They just paid a dividend of $3 and the market consensus is for constant 3% dividend growth forever. BB's bonds sell for $975. They pay semi-annually, have 7 years to maturity, a coupon rate of 4% and par value of $1.000. BB's marginal tax rate is 40% Their target capital structure is 60% equity and 40% debt. What is the WACC for the project? a. 8.075 b. 8.274 c.8.463