question Assume that North Pole Inc.'s target capital structure is 45% debt and 55% common equity. The firm's yield to maturity on bonds is 7.5%; investors' require rate of return on the firm's common stock is 15%, and the firm has a 40% marginal tax rate. What is the firm's weighted average cost of capital?

ABS Solution Co.'s new budget system will cost $700,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $140,000 in year three, and $180,000 in year four ABS Solution Co.'s required rate of return is 8%. What is the internal rate of return of this project?