The all-equity firm Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. MHMM is considering a new investment that has the same PE ratio as the firm. The cost of the investment is $640,000, and it will be financed with a new equity issue. Some recent financial information for the company is shown here: Stock price $50 Number of shares = 30,000 Total assets = $8,700,000 Total liabilities = $3,600,000 Net income = $600,000

1. What is the ROE of the new investment if we want the price after the offering to be $50 per share?

2. What is the NPV of the new investment?

*Show your calculations. Answers without numeric calculations will not get credit. *