"We will need to determine the required return for our intended project so that we have a decision criteria defined for the project," she says. "Do you have the information I need to describe capital structure and to calculate the weighted average cost of capital (WACC)?" you ask. "I do," she smiles. "We can determine the target WACC for Apix Printing Inc., given these assumptions," she says as she hands you a piece of paper that says the following: Weights of 40% debt and 60% common equity (no preferred equity) A 35% tax rate Cost of debt is 8% Beta of the company is 1.5 Risk-free rate is 2% Return on the market is 11% "Great," you say. "Thanks." "Be sure to indicate how these costs of capital might be used to determine the feasibility of the capital project," Mary says. "I want your recommendation about which is more appropriate to apply to project evaluation, too. Let me know what you think."