(8 pts) Calculate the NPV and IRR of the following cash flows if the discount rate is 15% 0 4 5 Year Cash Flow 1 2000 2 3000 3 3500 -10000 4000 5000 NPV IRR (5 pts) Company A has a typical capital structure of an airplane engine manufacturer, with 70% in debt, 5% in preferred stock, and 25% in common equity. If the cost of debt is 6%, the cost of preferred stock is 8% and the cost of common stock is 12%, what is the weighted average cost of capital (WACC) of company A if the corporate tax rate is 20%? ********* WACC (9 pts) Medtronic is one of the most successful medical device companies based in Boston. One of the most recent projects is a rapid testing device using saliva for Covid-19 antibody. The project requires an initial investment 800 million (year 0). The discount rate is 15%. There are two expected outcomes. Scenario 1: If the project is successful and on schedule, the free cash flow generated will be 100 million starting in year 1, growing at 10% each year and last forever. Scenario 2: If the project hits roadblocks and is delayed, there will be an additional investment of 400 million in year 1, zero cash flow in year 2, and 100 million positive cash flow starting in year 3, growing at 10% each year going forward and last forever. If there is 80% chance of scenario 1 and 20% of scenario 2, what is the expected NPV of this project? Scenario 1 NPV Scenario 2 NPV Expected NPV million million million