Highpark Industrial has 100,000 bonds outstanding that are selling at par value. Bonds with similar characteristics are yielding 7.5%. The company also has 1 million shares of preferred stock outstanding and 5 million shares of common stock outstanding. The preferred stock sells for $56 per share and pays a dividend of 10.5% on $100 par value. The common stock has a beta of 1.2 and sells for $38 a share. The U.S. Treasury bill is yielding 3% and the return on the market is 12%. The corporate tax rate is 34%. a) What is Highpark Industrial's weighted average cost of capital? b) The company is considering a new project they consider to be a little riskier than their current operations. Thus, management has decided to add an additional 2.5% to their company's overall cost of capital when evaluating this project. The project has an initial cash outlay of $30,000 and projected cash inflows of $12,000 in year one, $20,000 in year two, and $8,000 in year three. What is the projected net present value of the new project?