The third task is to try to work on reducing the company's cost of capital. During the last board meeting. It was discussed that the company is currently adopting a conservative leverage policy (with a debt-equity ratio of 0.3) and that there could be a room to grow the company's debt. Steve argued that the company can tolerate adding up more debt to its capital structure up-to a debt-equity ratio of 0.6. He was asked to analyse the impact of this suggested change in capital structure on the company's overall weighted average cost of capital. The company currently has debt in the form of a 7.5% semi-annual bond issue outstanding with 15 years to maturity. The bond currently sells for 95% of its face value of $1000. Also note that: The company's cost of capital = 12% The risk-free rate = 2% The market portfolio has an expected return of 9% The company has a beta of 1.74. The tax rate = 40% Questions: 1) Calculate the NPV & the IRR of introducing the new product (the first task) assuming that the asset class will be closed. Should the company proceed with this project? Explain. 2) Calculate the NPV & the IRR of the new project (the first task) assuming that the asset class will remain open. 3) Calculate the NPV and the IRR of the project of replacing the old production line with a new one with an advanced technology (the second task). Should the company proceed with replacing the production line? Explain. 4) Calculate the new weighted average cost of capital if the company change its capital structure to a level of debt/equity ratio of 0.6 (the third task) 5) If the company's overall cost of capital is to be changed to reach the level calculated in your answer to question 4, would your conclusion to question 1 be changed? 6) If the company's overall cost of capital is to be changed to reach the level calculated in your answer to question 4, would your conclusion to question 3 be changed