Regal Industries has the following capital structure. Its corporate tax rate is 35%.Security Book Value Market Value Weight Cost Debt $18 million $20 million6%

Common stock $27 million 50 million14%

A.Compute WACC == ....................... %

B.Regal is evaluating a project costing $48,000 which will generate $10,000 for 6 years. It will require an increase of $2,000 in NWC at the outset, but no recapture. Should Regal accept the project?

NPV = $ ....................................Accept? ............................