The company has the following capital structure:

Account $|$ $ $|$ Costs before tax

Long$-$term Debt $|2,000,000|10\%$

Preferred Stock $|500,000|14\%$

Common Stock $|2,500,000|18\%$

$1.$ Calculate the weighted average cost of capital $($WACC$)$ with a tax rate of $36\%.$

$2.$ Using the same cash flows in exhibit I find the NPV$,$ PI$,$ IRR and MIRR $($Use the WACC you have computed above$).$ Which project$($s$)$ would you recommend and why $($show your calculations$)?$