* find WACC, NPV, IRR, MIRR, and payback period

Bobcat Inc. provides you with the following information about firm's cost of capital. Find WACC Tax rate = 35%. 8-year, 10% coupon, semiannual payment non-callable bonds sell for $998. New bonds will be privately placed with no flotation cost with $1,000 par value. 9%, $100 par value, quarterly dividend, perpetual preferred stock sells for $98.5. The firm plans to issue new common stock with the flotation cost of 5%. Common stock currently sells for $120. D. = $8.2 and g = 4%. Target capital structure: 35% debt, 15% preferred, 50% common equity Assume that Bobcat Inc. is considering a project S Purchase $1,500,000 of equipment in 2019 (t=0) Inventory increase $120,000, account payable increase $20,000. All other working capital components stay the same. Project lasts for 4 years Sale forecasts (in unit): 2020-1.2M, 2021-1.5M, 2022-2 M, 2023-2.45M. Selling price is $1.5: unit Operational cost is 65% of sale 4-year straight line depreciation Salvage value = $35,000, fully recovers NOWC at the end of the project Bobcat Inc. only accepts a project with less than 3 years of payback. Find NPV, IRR, MIRR, Payback period Should Bobcat Inc. invest in project S based on the capital budgeting criteria for NPV, IRR, MIRR, and Payback period