Gopher Golf is considering a new project that would cost $200,000 and require an additional investment in net working capital of $30,000. Gopher Golf has enough taxable income to take advantage of the new 2018 tax laws which would allow them to immediately expense the cost of the project.

What is the initial cash outflow for the new project id Gopher Golfs tax rate is 25%?

	A.	$172,500
	B.	$80,000
	C.	$180.000
	D.	$230,000

Smith Brothers has no retained earnings. The company uses the CAPM to calculate the cost of equity capital. The company's capital structure consists of common stock, preferred stock, and debt. Which of the following events will reduce the company's WACC?

	A.	An increase in the company's beta.
	B.	An increase in the market risk premium.
	C.	An increase in the flotation costs associated with issuing preferred stock.
	D.	An increase in the flotation costs associated with issuing new common stock.
	E.	A decrease in expected inflation.