As a CFO, you need to evaluate the feasibility of purchasing a new equipment for a steel milling project

which will require a capital investment of US$$25,000.$ The project is expected to generate US$$15,000$

free cash flows in the next four years.

To finance the equipment purchase, your company will raise US$$5,000,$ a $10-$year $8\%$ annual coupon

bond sells for US$$1,300$ with high probability of being called at US$$1,050$ five years from now, issue

preferred stock of US$$10,000$ paying a US$$3$ dividend sold for US$$25$ and the remaining balance of

the required amount will be funded by issuing new common shares which can be sold for US$$50$ per

share. The firm paid a US$$3$ dividend last year and expects dividends to continue growing at a rate of

$10\%$ per year. The flotation costs of issuing new common stock will be US$$2$ per share and the firm$$s

tax rate is $25\%.$

Required:

According to the NPV criterion, what is your recommendation?