The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $57,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Cash Flow 1 $ 22,000 2 24,000 3 26,000 4 32,000 5 14,000 a. If the cost of capital is 11 percent, what is the net present value of selecting a new machine? (Do not round intermediate calculations and round your final answer to 2 decimal places.) b. What is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. Should the project be accepted? multiple choice Yes No

Given the following information:

Percent of capital structure:

Debt	35	%
Preferred stock	15
Common equity (retained earnings)	50

Additional information:

Bond coupon rate		15%
Bond yield to maturity		10%
Dividend, expected common	$	1.00
Dividend, preferred	$	8.00
Price, common	$	40.00
Price, preferred	$	102.00
Flotation cost, preferred	$	8.50
Growth rate		10%
Corporate tax rate		40%

Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)