You are a consultant who was hired to evaluate a new product line for Markum

Enterprises. The upfront investment required to launch the product line is $$10$ million. The

product will generate free cash flow of $$750,000$ the first year, and this free cash flow is expected

to grow at a rate of $4\%$ per year. Markum has an equity cost of capital of $11\mathrm{.}3\%,$ a debt cost of

capital of $4\mathrm{.}33\%,$ and a tax rate of $25\%.$ Markum maintains a debt$-$equity ratio of $0\mathrm{.}40.$

$($a$)$ What is Markum$$s WACC?

$($b$)$ What is the NPV of the new product line using WACC?

$($c$)$ How much debt will Markum initially take on as a result of launching this product line?

$($d$)$ How much of the product line$$s value is attributable to the present value of interest tax

shields?