FINA Company's assets are $750 million, financed through bank loans, bonds, preferred stocks and common stocks. The amounts are as follows:

Bank loans: $ 100 million borrowed at 5%

Bonds: $280 million, paying 8% coupon with semi-annual payments, and maturity of 10 years. FINA sold its $1,000 par-value bonds for $970 and had to incur $20 flotation cost per bond.

Preferred Stocks: $120 million, paying $15 dividends per share. FINA sold its preferred shares for $220 and had to incur $20/share flotation cost.

Common Stocks: $250 million, beta is 3.20, risk free rate is 5 percent, and market rate is 10%.

i. If FINA is subject to 30% tax rate, what is the WACC for FINA?

FINA can invest $11 million in a new production plant. The plant has an

expected life of 5 years and forecasted sales are 6 million a year. Fixed costs are $2 million a year, and variable costs are $1 per unit. The product will be priced at $2 per unit. The plant will be depreciated straight-line over 5 years to a salvage value of $1 million. FINA uses the WACC to compute the present value of the future cash flows.

ii. What is the project's NPV under these base-case assumptions? Should the company accept the project?