QUESTION 31 A firm has is financed through a combination of $300,000 debt, $100,000 preferred stock, and $600,000 common equity. The pre-tax cost of the debt is 8%, and the fir's tax rate is 35%. The cost of the preferred stock is 12%, and the cost of the common equity (common stock) is 9%. What is this this firm's WACC? Answer: (8 pts.) TT T Arial 3 (12pt) T E E 3. 's QUESTION 32 A new project is expected to generate annual sales of $74 million, annual expenses of $42 million, and an annual depreciation expense of $10 million. The firm's tax rate is 35%. Calculate the OCF (Operating Cash flow) for the year by using any of the three methods discussed in the chapter 9. Answer: (6 pts) TTT Arial 3 (12pt) TEE 5.025 QUESTION 33 Calculate the NPV for a project with the following cash flows. The discount rate (weighted average cost of capital) is 796 and the initial investment is $50,000. Cash flow each year: Year 1: $10,000 Year 2: $12,000 Year 3: $15,000 Year 4: $15,000 Year 5: $15,000 Answer: (6pts)