i. The cost of capital to a firm is the annual cost of using the funds it has invested in it. Examine the information provided for Henley Ltd - what is the firm's 'Cost of Capital'? Note: Tax rate is 30% Using: Weighted Average Cost Of Capital (WACC) =[ After-tax cost of debt ][% Debt financing ] + [Cost of equity] x [\%Equity financing] ii. Henley Ltd is reviewing a potential innovation project with an anticipated return of 27% that requires an initial capital outlay of 300,000. How much is this project likely to contribute to the firm's wealth? Using: Economic Profit =( Return Cost of Capital ) Invested capital