1. (Related to Checkpoint 14.4)(Flotation costs and NPV analysis) The Faraway Moving Company is involved in a major plant expansion that involves the expenditure of $212 million in the coming year. The firm plans on financing the expansion through the retention of $142 million in firm earnings and by borrowing the remaining $70 million. In return for helping sell the $70 million in new debt, the firm's investment banker charges a fee of 250 basis points (where one basis point is 0.01 percent). If Faraway decides to adjust for these flotation costs by adding them to the initial outlay, what will the initial outlay for the project be?

The flotation cost adjusted initial outlay is $____________(Round to the nearest dollar.)

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5.(Cost of debt) Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 7.8 percent annual interest and matures in 15 years. Investors are willing to pay $946 for the bond and Temple faces a tax rate of 20 percent. What is Temple's after-tax cost of debt on the bond?

The after-tax cost of debt is _______________%. (Round to two decimal places.)