A. Company A is considering investing in a new project and its initial investment is USD. The new project is expected to generate the following cash flows over the next five years. The market rate for similar investments is 5 per cent. The risk-free interest rate is 1.5%. T1: -1,000,000 (Outflow) T2: 150,000 T3: 200,000 T4: 650,000 T5: 150,000 Calculate the net present value (NPV) and Interest Rate of Return (IRR). And please assess whether or not the project should proceed (show the process of how you got the answer). B. Explain the diversification effects of portfolio. C. Company B is financing only with bonds and stocks. - Debt Information: - $100 million outstanding bonds, current quote = 95, coupon rate = 5.5% with semiannual coupons payment, 5 years maturity, and Tax rate = 35% - Equity Information: - 50 million outstanding shares, $15 + C. Company B is financing only with bonds and stocks. - Debt Information: - $100 million outstanding bonds, current quote = 95, coupon rate = 5.5% with semiannual coupons payment, 5 years maturity, and Tax rate = 35% - Equity Information: - 50 million outstanding shares, $15 per share, beta = 1.3, market risk premium 5%, and risk-free rate = 1.5% 1. What is the cost of equity? 2. What is the after-tax cost of debt? 3. What are the capital structure weights? 4. What is the WACC? 5. Please assess whether or not the project should proceed (show the process of how you got the answer). Submission deadline cember 6 2020