FINA Corp has been producing consumer electronics. Currently, FINA is considering entering a new industry, Office supplies. FINA Corps beta without the new project is 1.5. The market risk premium is 6%. The average risk-free rate in the past year is 5%, while the current risk-free rate is 3%. The total shares outstanding of FINA is 10million. The stock price now is 20$ per share. The tax rate is 20%. The cost of debt for FINA is 4%. The value of debt is $100million. The following three firms are in the new industry that FINA wants to enter. Firm A is in both office supplies and consumer electronics. Both Firm B & C are in office supplies only.

1) What is the WACC of the project to enter the office supplies market?

2) If the IRR of the new project is 15% should FINA take the project

Firm WACC D/E Cost of Debt Tax Rate

A 10% 0.8 4% 30%

B 11% 1.0 5% 20%

C 10% 1.5 4% 25%

Please show detail steps and reasoning