The following information is available for Vinayak Clothings.

$$ NOI Rs $40$ million

$$ Interest on debt Rs $10$ million

$$ Cost of equity Rs $18\%$

$$ Cost of debt $12\%$

What happens to the average cost of capital if it employs Rs $100$ million in debt to finance a project that earns an operating income of Rs $20$ million? Assume that the NOI method applies and there are no taxes.

$12\mathrm{.}21\%$

$13\mathrm{.}21\%$

$14\mathrm{.}21\%$

$15\mathrm{.}21\%$