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Can you please help and show work for calculations? The company has the following capital structure: Account $ Costs before tax Long-term Debt 2,000,000 10%

Can you please help and show work for calculations?

The company has the following capital structure:

Account

$

Costs before tax

Long-term Debt

2,000,000

10%

Preferred Stock

500,000

14%

Common Stock

2,500,000

18%

  1. Calculate the weighted average cost of capital (WACC) with a tax rate of 36%.
  2. Using the same cash flows in exhibit I find the NPV, PI, IRR and MIRR (Use the WACC you have computed above). Which project(s) would you recommend and why (show your calculations)? (Initial Investment $2,000)

Exhibit I

Sum of cash flow
benefits $ 3,310.00 $ 7,165.00 $ 9,000.00 $ 3,561.00 $ 4,200.00 $ 6,200.00 $ 4,560.00 $ 4,150.00
Excess of cash flow
Over investment $ 1,310.00 $ 5,165.00 $ 7,000.00 $ 1,562.00 $ 2,200.00 $ 4,200.00 $ 2,560.00 $ 2,150.00

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