Question 3 (20 points) (a) You are considering the following two mutually exclusive projects. Both projects have the following cash flow: Project A Project A Project B Project B Year Cash Flow Year Cash Flow 0 -$87,000 0 -$85.000 1 $31,000 1 $15,000 2 $37,000 2 $20,000 3 S44,000 3 $90,000 Required Rate of 12% Required Rate of 14% Return Return Required Payback 2.5 years Required Payback 2.5 years Period Period (1) 5 points] Calculate the Net Present Value NPV, which project should you pick? (1) (5 points] Calculate the Profitability Index PI, which project should you pick? (b) [10 points) Clive Limited Company has a cost of debt of 7%, a cost of equity of 11%, and a cost of preferred stock of 8%. . The firm has 104,000 shares of common stock outstanding at a market price of $20 a share. There are 40,000 shares of preferred stock outstanding at a market price of $34 a share. The bond issue has a total face value of $500,000 and sells at 102% of face value. The tax rate is 34% What is the Weighted Average Cost of Capital WACC