National Electric Company $($NEC$)$ is considering a $$45\mathrm{.}1$ million project in its power

systems division. Tom Edison, the company's chief financial officer, has evaluated the

project and determined that the project's unlevered cash flows will be $$3\mathrm{.}21$ million per

year in perpetuity. Mr$.$ Edison has devised two possibilities for raising the initial

investment: issuing $10-$year bonds or issuing common stock. The company's pretax cost

of debt is $7$ percent and its cost of equity is $11\mathrm{.}8$ percent. The company's target debt$-$to$-$

value ratio is $80$ percent. The project has the same risk as the company's existing

businesses and it will support the same amount of debt. The tax rate is $25$ percent.

a$.$ Calculate the weighted average cost of capital. $($Do not round intermediate

calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$

b$.$ Calculate the net present value of the project. $($Do not round intermediate

calculations and enter your answer in dollars, not millions of dollars, rounded to $2$

decimal places, e$.$g$.,1,234,567\mathrm{.}89)$