Part 1 A firm has the current liabilities and equity financing on its balance sheet shown below. The firm has taxable income that puts it in a 35% federal tax bracket, and the state in which it operates levies a 4.7% income tax. Compute the firm's weighted average cost of capital. (10 point) Source Short-term loan Long-term loan Retained Earnings Common stock Amount $ 6,000,000 $21,000,000 $35,000,000 $32,000,000 Interest/ROR 7.5% 4.5% 17.0% 22.0% Proportion 0.06 0.22 0.37 0.34 Part 2 The same firm is considering the following projects to improve its production process. If the firm has a capital budget of $1,200,000, which projects should be accepted by the rate of return criteria? What is the firm's opportunity cost of capital? (5 points) Project First Cost Annual Benefit Life (years) $175,000 $ 45,000 $250,000 $ 62,500 $125,000 $ 40,000 $ 75,000 $ 16,500 $375,000 $102,500 $200,000 $ 41,500 $500,000 $165,000 Part 3 From your estimates of the WACC in part 1 and the opportunity cost of capital in part 2. what do you estimate the firm's true MARR to be? (5 points)