Parker Corporation is considering a project that costs $9,000,000 and will increase the after-tax cash flows by $2,000,000 per year for five years. The company has total assets of $80,000,000 and total debt of $20,000,000. The borrowing rate is 10 percent, the corporate tax rate is 21%, the risk-free rate is 2%, the beta of the stock is 1.5, and the return on the market is 9 percent.

5. The percent of debt in the capital structure is ________

6. The cost of equity is __________

7. The weighted average cost of capital is __________

8. The NPV of the project is _________

9. Should Parker undertake the project? Explain.