You are an analyst at a bank that has been asked to look into a project that is being undertaken by ABC Corp with a life of 10 years. The project will return cash flows of $2 million every year for 5 years and 4 million for the remaining 5 years after an initial investment of $10 million. The firm has a beta of 0.5 and the expected return of the market is 11%. There are currently 20000 shares outstanding with a current price of $15 per share. The risk-free rate is 3%. In terms of debt, the company has two outstanding bonds. Bond A is a 5% annual coupon bond with a yield of 3% and a face value of $1000 which has 10 years to maturity. Bond B is a 6% semi-annual coupon bond with an annual yield of 4%, a face value of $1000 and 5 years to maturity. The company has issued 85 of each. That corporate tax rate is 30%.

A. What is the firms cost of equity?

B. What is the firms cost of debt?

C. What is the firms weight average cost of capital?

D. What is the NPV of this project?