Continuing the scenario from question 1: The CFO of your company believes that the cost of capital it has been using may be outdated and needs redefined in the current economic environment. In reviewing the companys financials, she notes it has $1,200,000 of owners equity and $600,000 in debt. She determines the cost of equity to be 5% and the cost of debt to be 8%. Given this information, answer the questions below.

A) What is the companys weighted average cost of capital (WACC)?

B) Re-calculate the NPV of the acquisition given the new cost of capital.

C) Re-calculate the IRR of the acquisition given the new cost of capital.

D) Should the company purchase the new equipment? Explain.

Please show in excel with formulas and cell references.

Year	Cash Flow	Rate
0	$ (350,000.00)	9%
1	$ (10,000.00)
2	$ 45,000.00
3	$ 127,000.00
4	$ 168,000.00
5	$ 145,000.00

NPV	($9,975.92)
IRR	8.18%