Frozen Enterprises wants to expand its business by selling ice coffee in addition to ice tea. The CFO of Frozen Enterprises is provided with the following information on the new project. The company uses straight-line depreciation. The project has an economic life of 10 years. Total cost of the plant and equipment that will be required for the project is $4, 500,000, which will be depreciated to a salvage value of #250,000 and sold for that amount in 10 years. The sale of ice coffee will generate $2, 500,000 in sales each year for the next 10 years. Because of the expansion, operating costs will increase by $800,000 per year. The company spent $600,000 on testing various coffee flavors. The company will increase net working capital by $200,000 at the beginning of the project, and it will be liquidated at the end of the project. Frozen Enterprise' marginal tax rate is 40% Frozen Enterprises weighed average cost of capital (WACC) is 12% Based on this information, the initial net cash flow of the project (i.e, CFO) is $ -4, 600,000 -4,00,000 -4, 800,000 -4, 900,000 -5,000,000 Based on this information, the project's total cash flow in year 5 is $ 1, 190,000 1, 193,000 1, 960,000 1, 199,000 1, 202,000 The IRR of the this project is % 19.428 20.644 21.156 2.673 22.194 Cream and Crimson has a capital structure of 40% debt and 60% equity. The tax rate is firm's bonds currently trade in the market for $720. These face value $1,000 bonds have rate of 8%, paid semiannually, with 7 years to maturity. The firm's common stock trade per share. The dividend just paid was $2,00 and future dividends are expected to year. Cream and Crimson's WACC is %. 11.76 12.03 12.30 12.57 12.84