5.Calculate the WACC for Ingrid's Incredible Inns.Assume 11% cost of debt, 12% required return on preferred stocks, and 25% required return on common stocks.Also assume 40% taxes.Round answer to the tenths place (for example: 12.3%).

WACC =

6.Calculate the Net Present Value for Inn A and Inn B.Use the WACC as the cost of capital % calculated in 5 above.

Inn AInn B

0

1

2

3

4

5

6

7

8

9

10

Total

Which inn should she build?

7.What is the Internal Rate of Return (IRR) for Inn A and Inn B?Round answer to hundredths place (for example: 12.34%).

IRR Inn AIRR Inn B

Which inn should she build?