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CUBE Entertainment has a capital structure that is based on 4 0 percent debt, 5 percent preferred stock, and 5 5 percent common stock. The

CUBE Entertainment has a capital structure that is based on 40 percent debt, 5 percent preferred stock, and 55 percent common stock. The pretax cost of debt is 8 percent, the cost of preferred stock is 9 percent, and the cost of common stock is 15 percent. The tax rate is 21 percent. A project is being considered that is equally as risky as the overall company. This project has initial costs of $520,000 and annual cash inflows of $200,000,$300,000, and $100,000 over the next three years, respectively. Please calculate the WACC and NPV of this project, and describe your decision. (18%)
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