Newington Chemicals has planned capital expenditures of $1,500,000 for the coming fiscal year. They have prioritized five projects at a total cost of $1,500,000, to be financed in the following way:

Debt $300,000

Preferred Stock 300,000

Common Equity 900,000

The bonds have a coupon rate of 7% and will sell for par value. The preferred stock is 10%, $100 par. It sells for par value with $7 per share flotation costs. The common stock of the company sells for $75 per share with flotation costs of $5.00 per share. It is expected to pay a $9 dividend in the coming year. The company's growth rate is expected to be constant at 6%. The company's tax rate is 30%. The Net Income for the Company this year is expected to be $1,000,000. The dividend payout ratio is 70%. Assume the beginning retained earnings balance = 0.

EXAMPLE:	DEBT C/S	30/90 = .33 50/90 = .56	9.465(1-.3) = 6.63% 4/50 + .05 = 13%	2.1879 7.28
WACC 1
	Source:	Weight:	Cost of Capital: %	Weighted Cost:
RANGE:	Debt
	P/S
	C/E
				WACC 1 =
WACC 2
	Source	Weight:	Cost of Capital: %	Weighted Cost:
RANGE:	Debt
	P/S
	C/E
				WACC 2 =

Assume the cash flow from one of the five capital budgeting projects is as follows. Using the correct WACC from the primary post, calculate the NPV using WACC 1 and WACC2, fill in the highlighted areas in the chart, and post your answer in Discuss in the below Table Format:

1)

Year	CASH FLOW	NPV WACC1	NPV WACC2
0	(35,100)
1	17,000
2	15,000
3	13,000
	NPV =

2) Should this project be accepted or rejected? Explain.