a$)$ The capital structure of a company consists of debt and common equity. The firm has $500,000$ bonds outstanding that are selling at par value. The par value of each bond is $$1,000.$ Bonds with similar characteristics are yielding a before$-$tax return of $8$ percent. The company also has $30,000,000$ shares of common stock outstanding. The stock has a beta of $1\mathrm{.}50$ and sells for $$50$ a share. The return on U$.$S$.$ Treasury bills is $5$ percent and the market rate of return is $11$ percent. The company$$s tax rate is $25$ percent. What is the firm$$s weighted average cost of capital?

b$)$ The company is considering a five$-$year project that is expected to generate the following net $($or total$)$ after$-$tax cash flows.

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Year Operating Cash flow $($OCF$)*$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

$1$ $$1,000,000$

$23,000,000$

$34,000,000$

$46,000,000$

$57,000,000$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

$*$The operating cash flow is defined as after$-$tax net income $+$ depreciation

The initial investment $($or initial cost$)$ of the project is $$12,000,000.$ The assets used in the project will have a before$-$tax market value $($salvage or resale value$)$ of $$2,000,000$ at the end of project in year $5.$ Assume that the assets are fully depreciated over the five$-$year life of the project and the book value at the end of year $5$ is zero. The project also requires an initial investment in net working capital of $$1,000,000,$ which is fully recoverable when the project ends in year $5.$ The project has the same risk as the firm overall. Find the net present value $($NPV$)$ of the project. The answer needs to be solved on paper not using excel.