Sundae Inc is deciding whether to undertake a new project. The project is expected to be riskier than the firm's current operations. For cost of capital estimation management wants to use the subjective approach and add 4 percent to its weighted average cost of capital of the firm The new project is expected to generate free cash flow of $900,000 by the end of the first year, and the cash flows are projected to grow at a rate of 3 percent per year thereafter It requires an initial investment of $9 million The current capital structure of the firm is as follows one-year annual-coupon bond with coupon rate of 2 percent, 100,000 Debt: shares outstanding, par value of $2,000, selling for 100 percent of par. 1,100,000 shares outstanding, selling for $90 per share on the Corunon stock: balance sheet the stockholders' equity is $6 million the beta 15 1.1. Market 5 percent market risk premium and 6 percent risk-free rate. The corporate tax rate is 21 percent. Answer the following questions The pre-tax cost of debt of the firm is 8. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g. 32.16) - ) The cost of equity of the firm is 8. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) The debt/value ratio used in the calculation of the weighted average cost of capital of the firm is 8. The corresponding equity/value ratio is t. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g. 32.16).) The weighted average cost of capital of the farm is 8. (DO not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g. 32.16).) The cost of capital of the project is 8. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g. 32.16).) The net present value (NPV) of the new project is . (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g. 32.16).)