The firm is considering undertaking a project that costs $250,000 with an expected return of 13.5%.

How much new capital is needed? Not having enough existing capital, how would you recommend going about obtaining the additional funds

Financial Element	Cost
Before-tax cost of debt	6.5%
Tax rate	40%
Total long-term debt	$400,000
Cost of preferred stock	7.25%
Total preferred stock	$50,000
Cost of common stock	11%
Total common stock	$500,000
Finance utilized	$850,000