VIG Corporation is considering purchasing a CNC machine, with detailed information given below. CNC Machine Expected life: 4 years Equipment cost: $135,000 Installation Cost $37,000 Annual Operating Costs: $30,000 Salvage Value (after 4 years): $0 CCA Rate (Class 43): 30% In addition, the following is some general information about VIG. Marginal Tax Rate: 27% Cost of Retained Earnings: 15% Before-Tax Cost of Borrowing: 10.5% Total Debt (Before Project): $900,000 Total Equity (Before Project): $1,300,000 When financing the project, the company will use a combination of retained earnings (cash) and short-term loans. The details of the loans have not yet been established, but the company is assuming that its cost of borrowing will remain stable for the foreseeable future. a) Based on the companys debt ratio before the project (and the assumptions noted above), calculate its weighted-average cost of capital (WACC). b) When financing the initial investment (i.e., the amount to be invested at time zero), the company would like to maintain its current debt ratio. Calculate the amount that should be borrowed at time zero for this project.