XYZ Plumbing has a weighted-average cost of capital of 9.13 percent. The firm is evaluating a two-year project called the big air project, which is believed by all to have a cost of capital of 9.13 percent. The project would involve an initial investment of $73,000, an expected cash flow of -$27,000 in year 1, and an expected cash flow of $138,000 in year 2. DKs Barrel Factory has a lower weighted-average cost of capital than XYZ Plumbing.