21. Cully Company needs to raise $28 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. The company has a target capital structure of 55 percent common stock, 9 percent preferred stock, and 36 percent debt. Flotation costs for issuing new common stock are 10 percent, for new preferred stock, 6 percent, and for new debt, 3 percent. What is the true initial cost figure Southern should use when evaluating its project? A) $26,226,667 B) $29,993,600 C) $28,940,568 D) $31,352,282 E) $30,146,425 22. A project with an initial cost of $60,800 is expected to provide annual cash flows of $11,900 over the 6- year life of the project. If the required return is 8.6 percent, what is the project's profitability index? A) 1.125 B).740 C) .889 D) 1.000 E) .815