This Is a finance question , can you answer the part 1 of the question, I have ;provided all the data

You work in the Finance division of the Geelong Manufacturing Company Ltd. The company is in the process of deciding whether or not to purchase a new drilling machine. Your company's Chief Financial Officer has asked you to make a recommendation as to whether or not the company should proceed with the project. There are two parts to this Assisgnment. Part 1: Calculate the company's Weighted Average Cost of Capital. Part 2: Estimate the project's incremental free cash flows, calculate the project's NPV, IRR, Payback Period and Profitability Index, and make your recommendation as to whether the project should proceed by ticking the appropropriate boxes. (Use the Excel formula "=IRR" to calculate the Internal Rate of Return of the project.)FIN1FOF - FUNDAMENTALS OF FINANCE - ASSIGNMENT Geelong Manufacturing Company Ltd Balance Sheet as at 31/12/19 ASSETS LIABILITIES Notes Cash 120 Accounts payable 140 Accounts Receivable 180 Bank loan (interest only) 1 250 Inventory 620 Mortgage Loan 2 530 Property, plant & equipment 1,190 Corporate bonds 3 330 Total Assets 2,110 Total liabilities 1,250 SHAREHOLDERS' EQUITY Ordinary shares 4 400 Preference Shares 5 200 Retained earnings 260 Total shareholders' equity 860 Total liabilities and shareholders' equity 2,110 Notes The interest rate on the bank loan is 9.9% pa. 1 2. The interest rate on the mortgage loan is 5.4% pa. 3 The corporate bonds have a credit rating of A+ and have 2 years to maturity. They make semi-annual coupon payments at a coupon rate of 7% pa. 4. The ordinary shares are shown on the balance sheet at their book value of $1 per share. They have a beta of 1.2. They have just paid a dividend of $0.05. The dividend is expected to grow at a rate of 7% pa. for the next 4 years, and after that it will grow at a constant rate of 2% pa. in perpetuity. 5. The preference shares have a par value of $1 each and are shown on the Balance Sheet at their par value. They pay a constant dividend of 50.07 and they are currently trading for 51.1. 6. The market risk premium is 8.1%. Rating 1 yr 2 yr 3 yr AAA 4 yr 5 yr 124 6 yr 159 229 7 yr 194 8 yr 264 9 yr 10 yr AA+ 136 299 334 171 206 369 404 241 439 276 311 AA 346 148 183 381 218 416 253 451 288 AA- 323 358 160 195 230 393 428 265 463 300 A+ 335 172 370 207 405 242 440 277 312 475 A 347 184 382 219 417 254 452 289 324 487 A- 359 196 394 231 266 429 464 301 336 499 BBB+ 208 371 406 243 441 278 313 476 348 511 BBB 383 220 418 255 453 290 488 325 523 360 BBB- 232 395 430 267 465 302 337 500 372 535 BB+ 244 407 279 442 477 314 512 349 547 384 419 BB 454 256 291 489 326 524 361 559 396 BB- 431 268 466 303 338 501 373 536 571 408 443 B+ 280 478 513 315 548 350 385 583 420 B 292 455 490 327 362 525 560 397 432 595 B- 304 467 502 339 374 537 409 572 444 607 CCC+ 479 316 514 351 386 549 584 421 619 456 CCC 491 328 526 363 561 398 596 433 631 468 CCC- 503 538 340 375 573 608 410 445 643 480 CC 515 352 550 387 585 422 620 457 492 655 C 527 364 562 399 434 597 632 469 667 504 539 574 609 644 679FINIFOF - FUNDAMENTALS OF FINANCE -ASSIGNM ENT Proiect I nform ation The equipment will cost $900, is expected to have a working life of 4 years, and will be depreciated on a diminishing value basis to a book value of zero. The equipment is expected to have a salvage value of $130 at the end of 4 years. The new equipment will improve efficiency and result in increased revenue of $330 in its first year of operation, but because of reduced efficiency from normal wear and tear, revenue will decrease by 3% (from the previous year's revenue) for each of the remaining 3 years of the equipment's life. Excluding maintenance, all other costs from operating the equipment will be $210 per year. Maintenance costs will amount to $120 in the equipment's first year of operation, and will then increase by $30 per year for the remaining 3 years of the equipment's life. The equipment will require additional net working capital of $160. The net working capital will be recovered in full after the equipment is sold at the end of its working life. The equipment will be installed in a building that is owned by the company, but currently is not being used. if the project does not proceed, this building could be rented out for $160 per year. A feasibility study has been undertaken into the purchase of the new equipment. The cost of preparing the feasibility study was $400. The company has sufficient capital to undertake all positive-NW projects. if the Payback Period method is used to evaluate projects, management's policy is that the maximum acceptable payback period is 3 years, and all cash flows in Year 0 would need to be recovered within 3 years for the project to be acceptable under this method. PART 1 - WEIGHTED AVERAGE COST OF CAPITAL Enter numbers in the "Cost" column as percentages rounded to 3 decimal places. Enter whole numbers only in the "Value" column and base your weights on those whole numbers. Enter numbers in the "Weight" column as percentages rounded to 2 decimal places. COST VALUE WEIGHT (3 decimal (Whole (2 decimal SOURCE OF CAPITAL places) numbers) places) Bank Loan (interest only) Before-tax cost of bank loan Market value of bank loan Mortgage Loans Before-tax cost of mortgage loan Market value of mortgage loan Corporate Bonds Credit spread basis points Credit spread as a percentage (2 decimal places) Risk-free rate to be used to calculate cost of corporate bonds (3 decimal places) Before-tax cost of corporate bonds Face value of all bonds Coupon rate Number of years to maturity Number of coupon payments per year Total number of coupon payments remaining Total value of all coupon payments paid per year Value of each individual coupon payment Semi-annual yield (3 decimal places) Value of corporate bonds Ordinary Shares Risk-free rate to be used to calculate cost of ordinary shares (3 decimal places Beta Market risk premium Cost of ordinary shares You may not need every line in the following table of dividends. Only enter theYou may not need every line in the following table of dividends. Only enter the dividends needed to calculate the share price. Enter the actual dividends - not their present value - rounded to 4 decimal places. Time value of money calculations should be done in the final step when you calculate the share price. Dividend 1 year from now Dividend 2 years from now Dividend 3 years from now Dividend 4 years from now Dividend 5 years from now Dividend 6 years from now Price of ordinary shares (Round to 2 decimal places) Number of ordinary shares Total market value of ordinary shares Preference Shares Preference dividend per share Preference share price Cost of preference shares Number of preference shares Total market value of preference shares SO 0% Tax Rate All of the weighted costs below should be after-tax costs (where applicable), as percentages rounded to 2 decimal places Weighted Cost of the Bank Loan (i. e. cost x weight) Weighted Cost of the Mortgage Loan Weighted Cost of the Corporate Bonds Weighted Cost of the Ordinary Shares Weighted Cost of the Preference Shares Weighted Average Cost of CapitalFINIFOF - FUNDAMENTALS OF FINANCE - ASSIGNMENT Online Data Follow the instructions below to locate online data that you will need for your Assignment. Read all intructions on this page very carefully - don't just collect the requested data. The instructions on this page tell you exactly what to do with the data when completing the other parts of your Assignment. 1. Determine Geelong's tax rate. Go to www.ato.gov.au In the Search box at the top of the screen, enter 'Company tax rates' and click the magnifying glass. You may need to click on more than one link to figure out the appropriate tax rate for Geelong. Enter the company tax rate for this company for the 2019/20 tax year (as a percentage) in the box below. (Hint: Geelong's turnover is over $50 million.) Geelong's tax rate: 30.0% 2. Find the yield on 2-year and 10-year Australian Treasury bonds. Goto www.rba.gov.au Click on "Statistics" near the top of the page, and then, under the subheading "Economic and Financial Statistics", click on "Interest Rates" (Depending on your browser, you may then have to scroll up until you see the Interest Rates section.) Click on the "XLS" link to open the spreadsheet containing "Indicative Mid Rates of Commonwealth Government Securities - F16". This spreadsheet contains daily yield data for Australian Treasury bonds on issue on a given date. Each column conains yields for a specific bond. Each row contains the yields for each bond for a given date - the date shown in Column A. Scroll down to find the yields on 24 August 2020. Row 3 of the RBA spreadsheet contains the maturity date of each bond. Search along Row 3 to find the column containing the bond that is closest to maturing 10 years from 24 August 2020. If you find that the date that is 10 years from 24 August 2020 falls between two maturity dates (which it almost certainly will), make sure you select the bond that will have MOST RECENTLY MATURED on that date - not the one that will next mature after that date. Make sure you are looking up yields for "Treasury Bonds", as specified in Row 2. If the entry in Row 2 says "Treasury Indexed Bonds", you have gone too far. Then go down that column to find the yield as at 24 August 2020. The value you see is the yield on 10-year Australian Treasury bonds on 24 August 2020, which we will use as the risk-free rate in the Capital Asset Pricing Model in Part 1 of the Assignment. Enter the 10-year risk-free rate in the box below (as a percentage to 3 decimal places). 10-year risk-free rate: 85.500% Search along Row 3 of the RBA spreadsheet to find the column containing the bond that is closest to maturing 2 years from 24 August 2020 Again, if the date that is 2 years from 24 August 2020 falls between two maturity dates, select the bond that will have most recently matured on that date - not the bond that will next mature after that date. Then go down that column to find the yield for that bond as at 24 August 2020. In Part 1 you will add the credit spread for Geelong's bonds to the 2-year risk-free rate to determine the before-tax cost of the company's bonds. Enter the 2-year risk-free rate in the box below (as a percentage to 3 decimal places). 2-year risk-free rate: 26.500%