The total market value of the equity of Okefenokee Condos is $$4$ million, and the total value of its debt is $$1$ million. The treasurer

estimates that the beta of the stock currently is $1\mathrm{.}0$ and that the expected risk premium on the market is $11\%.$ The Treasury bill rate is

$3\%,$ and investors believe that Okefenokee's debt is essentially free of default risk.

a$.$ What is the required rate of return on Okefenokee stock?

Note: Do not round intermediate calculations. Enter your answer as a whole percent.

b$.$ Estimate the WACC assuming a tax rate of $21\%.$

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places.

c$.$ Estimate the discount rate for an expansion of the company's present business.

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places.

d$.$ Suppose the company wants to diversify into the manufacture of rose$-$colored glasses. The beta of optical manufacturers with no

debt outstanding is $2\mathrm{.}0.$ What is the required rate of return on Okefenokee's new venture? $($You should assume that the risky

project will not enable the firm to issue any additional debt.$)$

Note: Do not round intermediate calculations. Enter your answer as a whole percent. United Pigpen is considering a proposal to manufacture high$-$protein hog feed. The project would make use of an

existing warehouse, which is currently rented out to a neighboring firm. The next year's rental charge on the warehouse

is $$200,000,$ and thereafter, the rent is expected to grow in line with inflation at $4\%$ a year. In addition to using the

warehouse, the proposal envisages an investment in plant and equipment of $$1\mathrm{.}80$ million. This could be depreciated for

tax purposes straight$-$line over $10$ years. However, Pigpen expects to terminate the project at the end of $8$ years and to

resell the plant and equipment in year $8$ for $$600,000.$ Finally, the project requires an immediate investment in working

capital of $$450,000.$ Thereafter, working capital is forecasted to be $10\%$ of sales in each of years $1$ through $7.$ Year $1$ sales

of hog feed are expected to be $$6\mathrm{.}20$ million, and thereafter, sales are forecasted to grow by $5\%$ a year, slightly faster

than the inflation rate. Manufacturing costs are expected to be $90\%$ of sales, and profits are subject to tax at $35\%.$ The

cost of capital is $12\%.$

What is the NPV of Pigpen's project?

Note: Enter your answer in thousands, not in millions, rounded to the nearest dollar.

NPV

and