Shannon Industries is considering a project which has the following cash flows. The project has a payback of 2.2 years. The firm's cost of capital is 12 percent. What is the project's NPV? Year Cash Flow 0 -$6,000 1 2,000 2 ? 3 5,000 Assume that you are an intern with the Brayton Company, and you have collected the following data: The yield on the company's outstanding bonds is 7.75%; the cost of equity is 9.5%; and the target capital structure is 45% debt and 55% common equity. The company has retained earning $85,000 and needs to raise $200,000 capital. What is the firm's WACC if firm maintains the same capital structure? Compute the profitability index (PI) for each of the following project. Assume these projects are independent projects, use PI to select determine the project(s) you will undertake. The cost of capital is 10%. Project Initial investment NPV X $12,000 $1, 500 Y $8,000 $700 Z $10,000 $1, 250