Food and Health Company is expanding and has an average risk project under consideration The company decides to fund the project in the same manner as the companys existing capital structure The cost of debt is 9 00 , the cost of preferred stock is 12 00 , the cost of common stock is 16 00 , and the WACC adjusted for taxes is 11 50 The estimation for the incremental cash flows for this project are presented below (NPV) of this project Show all steps, workings, and formula(s) clearly (6 marks) Click here to enter text According to the NPV decision making rule, should this project be accepted Why or why not Word limit 30 words (answers beyond word limit will not be marked) (2 marks) Click here to enter text If the internal rate of return (IRR) of the project is estimated to be 11 , according to the IRR decision making rule, should this project be accepted Why or why not (2 marks) Incremental cash flows Category TO T12 T24 T34 Investment $2,500,000 $250,000 INWC2 Operating Cash Flowe Salvage $750,000 $750,000 $250,000 $750,000 $50,000

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Food and Health Company is expanding and has an average-risk project under consideration. The company decides to fund the project in the same manner as

Food and Health Company is expanding and has an average-risk project under consideration. The company decides to fund the project in the same manner as the companys existing capital structure. The cost of debt is 9.00%, the cost of preferred stock is 12.00%, the cost of common stock is 16.00%, and the WACC adjusted for taxes is 11.50%. The estimation for the incremental cash flows for this project are presented below.

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(NPV) of this project? Show all steps, workings, and formula(s) clearly. (6 marks)

Click here to enter text.

According to the NPV decision making rule, should this project be accepted? Why or why not? [Word limit: 30 words (answers beyond word limit will not be marked).] (2 marks)

Click here to enter text.

If the internal rate of return (IRR) of the project is estimated to be 11%, according to the IRR decision making rule, should this project be accepted? Why or why not? (2 marks)

#Incremental cash flows: Category TO T12 T24 T34 Investment $2,500,000 $250,000 INWC2 Operating Cash Flowe Salvage $750,000 $750,000 $250,000 $750,000 $50,000