The CFO has tasked you with providing the board at least $3$ pricing options. The estimated life of the SIS is $15$ years after which point the program will need to be replaced. You are to make a recommendation for the most economical option based on NPV and IRR. As part of your presentation, you will need to present these for all three options.

Option $1$ has an initial cost of $$1\mathrm{.}75$ million $($$$1,750,000)$ and annually saves the college $$250,000$ in other expenses.

Option $2$ has an initial cost of $$2\mathrm{.}5$ million and annually saves the college $$325,000$ in other expenses.

Option $3$ has an initial cost of $$2\mathrm{.}75$ million and annually saves the college $$350,000$ in other expenses.

To determine the NPV and minimum IRR that is acceptable, the WACC must be computed. The CFO has told you that the college$$s long$-$term financing is $30\%$ debt with an after tax yield of $8\%,$ the remaining long$-$term funding is fund capital $($equity$)$ on which the Board requires a $10\%$ return. Is the WACC $8\mathrm{.}68\%$ or $9\mathrm{.}4\%?$