Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $15 per share and the common stock for $20 per share. There are 1,000 common shares and 100 preferred shares outstanding. Bonds currently have a quoted price of 93.58. Preferred shares pay a 7.5% dividend. The beta of the common stock is 1.5, the expected return on the market is 11%, and the risk-free rate is 4%. The company's tax rate is 40% What is the cost of debt? What is the cost of preferred shares? What is the cost of common equity? What is the capital structure (weights) of the firm based on market values? What is University's weighted average cost of capital? University Products is considering purchasing a new inventory control system that will cost $200,000. Management estimates that the firm will save $60,000 per year as they will not have to carry as much inventory at any given lime. The system should last 5 years before it will need to be replaced. At the end of the economic life, the machine will have no salvage value. This machine is in asset class 9 which has a CCA rate of 15%. Flotation costs for debt are 3%, for preferred shares are 5% and for common stock are 7%. If the asset class is expected to remain open at the end of the project, based on NPV analysis, should the project be undertaken? Assume this project will not alter the risk of the firm