In order to finance this project you issue a 5-year zero coupon bond for the total amount of the initial investment. The principal is $1800. If taxes are 30%.

Instead of using only debt, you decide to use a combination of debt and equity. You issue a 5-year zero-coupon bond for $700. The principal is $1,200. The remaining is financed using equity. The is 1.2, the market portfolio return is 20%, and the risk-free rate is 2%. Taxes are 30%. What is the new WACC and new NPV for the project? Do you accept or reject?