A small energy company has the following investment of 500 thousand, it can build a wind power plant which will produce 6000 MWh of electricity for three years. Operating costs would be 50 thousand per year. On average it believes it will obtain an average price of 50 per MWh for the electricity produced. In summary the revenue and costs to be considered are as follows Year Investment (E000) Revenues (E000) Operating Costs (000) 300 300 300 50 50 50 The company is currently all-equity financed. Currently the risk free rate of return rate (based on the UK Government Bonds) is 5% and the expected return on Market portfolio (FTSE 100 Index) is 15%. The market beta for the Company is 15. and determine whether the Company should undertake the project (a weighting of 20 percent) (b) Calculate the levelized cost of electricity (LCOE) associated with this project and explain why this is useful information for the energy company in this case? (NB NPV Total Costs LCOE (a weighting of 25 percent) (c) Suppose now that the management of the company considers financing 40% of the can borrow at the risk free interest rate. What rate of return would now be required by the investors in the new project? Explain why the equity rate of return differs when the project is partialy (a weighting of 25 percent) cost of the project by debt where management assumes it financed by debt