1. It is a capital budgeting problem. Assume that XYZ company wants to invest in a new project that needs $2.65 billion (time 0). It is expected that it will give cash flows as given below.

Year 0	Year 1	Year 2	Year 3	Year 4	Year 5-10	Year 11	Year 12-14	Year 15
2,650 million	0 million	0 million	100 million	200 million	550 million	400 million	200 million	50 million

Find the NPV and IRR of the project. Should you accept the project? Discuss in details why you accept or reject the project. Assume WACC is 10%.

2. If the firm wants to reduce its WACC (from 10% to 8%), how should the company do it? (think about it, I am not helping in this question).