Please round everything to one decimal place if rounding is necessary $($i$.$e$.,12\mathrm{.}5\%)$ with the

exception of Capital Weights. Monetary answers should be rounded and in dollars and cents.

Ooey Gooey Candy Mfg$.$ is considering expanding by adding Skinny Minnie Diet Centers. Ooey has provided its financial team,

headed by you, the following information:

Ooey's current capital structure is $$195,000$ debt, $$85,000$ preferred stock and $$375,000$ common stock.

Ooey has bonds currently outstanding that mature in $15$ years with a coupon rate of $\frac{43}{4}\%$ and an initial price of $$965.$

If Skinny is added, Ooey Gooey would issue new securities$,$ common stock would have flotation costs of $$8$ per share,

preferred stock would have flotation costs of $$125$ and new bonds would have a flotation cost of $8\mathrm{.}5\%$ of the current price of

$$965.$

Preferred Stock is currently selling for $$1,250$ per share with a dividend of $$175$ per share.

The current $3-$month T$-$bill has an interest rate of $2\mathrm{.}25\%.$

Since Skinny Minnie has a product base that is totally unrelated to Ooey Gooey's current product line, it has been determined

that adding Skinny Minnie Diet Centers would have a risk factor as determined below $($rounded to one decimal place$)$:

Beta $=1\mathrm{.}8$

Price of Ooey stock is $$\frac{55}{?}$ share.

The dividends for Ooey Gooey over the last few years are as follows:

The anticipated cash flows after the addition that can be attributed to it are as follows:

Ooey Gooey is in the $36\%$ tax bracket.

If Skinny Minnie has an initial cost of licensing expenses of $$15,000,$ equipment purchase of $$85,000,$ building leasing of $$385,000,$

additional personnel with salaries and related expenses of $$100,000,$ and assorted additional expenses of $$195,000($all of this is used

in determining the initial investment$)$ should Ooey Gooey add Skinny Minnie? In other words what is the NPV and IRR and do they

indicate a go situation?

Answers in Random order$/$There are more than you need:

a$.7\mathrm{.}8\%$

b$.8\mathrm{.}3\%$

c$.15\mathrm{.}6\%$

d$.57\%$

e$.$ $$882\mathrm{.}98$

u$.1\mathrm{.}8$

f$.13\%$

h$.8\mathrm{.}3\%$

j$.2\%$

v$.$ $$-211,589N$

k$.5\mathrm{.}95\%$

g$.30\%$

i$.1\%$

o$.12\mathrm{.}1\%$

w$.3\mathrm{.}2\%$ No

p$.$ $$1\mathrm{.}22$

m$.$ $$1,068,410$

n$.30\%$

r$.2\%$

s$.$ $$288,411$

t$.4\mathrm{.}7\%$

x$.7\mathrm{.}7\%$

y$.-$ $$209716$ No

z$.3\mathrm{.}3\%$