Suppose you have been working two jobs, lived frugally, and built up a nice nest eggr of $100,000. You have now decided it is time to work for yourself. You are looking at a variety of opportunities and have narrowed them down to two possible independent projects. You will invest the entire $100,000 in only one of these. Your due diligence resulted in the following estimated projected 4-yeur cash flows for each project: 1) Your opportunity cost of investing $100,000 is 10%. Find the NPV, IRR, payback period, and discounted payback period for each project. 2) Would the NPVs change if the recjuired rate of retum changed? Explain. 3) Would the project's IRRs change if the required rate of return changed? Fxplain 4) Which of these project(s) is/are feasible based on your analysis? Would your answer change if your required return increased to 17% ? Explain. From now on, assume that project X and Y are mutually cxclusive. 5) What is the IRR of the better project? (Hint: The better project might not be the one with higher (RR) 6) Calculate the crossover rate. What does this crossover rate mean and how might it be used to determine the "best" project?' (Hint: See foomote 6 in (hapter 9 for guidance in computing the crossover rate) 7) What is each project's MIRR? Would the MIRRs change if the required rate of return changed? Part 2. The Cost of Capital (60 points) Given the following: (a) The firm's marginal tax rate is 40%. (b) The current price of Coleman's 12% coupon, semiannual payment, noncullable $1,000 face value bonds with 15 years remaining to maturity is $1,153.72. The firm does not use short-term interest-bearing debt on a permanent basis. New bonds would be privately placed with no tlotation cost. (c) The current price of the firm $9%,$100 par value, quarterly dividend, perpetual preferred stock is $105. Coleman would incur flotation costs equal to 4.8% of the proceeds on a new issue. (d) Coleman's common stock is currently selling at $50 per share. Its last dividend (Dn) was $4.19, and dividends are expected to grow at a constant rate of 5% in the foreseeable future. Coleman's beta is 1.2 , the yield on T-bonds is 7%, and the market risk premium is estimated to be 6%. For the own-bondyield-plus-risk-premium approach, the finn uses a 4% judgmental risk premium. (e) Coleman's target cupital structure is 30\% longr-term debt, 10% preferred stock, and 60% common equity, (f) There are 70,000 bonds outstanding, 200,000 preferred shares outstanding, and 3 million common shares outstanding