You have the following information about Burgundy Basins, a sink manufacturing company.

Equity shares outstanding....20 million

Stock price per share ..........$40

Yield to maturity on debt.......7.5%

Book value of interest bearing debt ....$320 million

Coupon Interests rate on debt ....4.8%

Market value of debt.....$290 million

Book value of equity.....$500 million

Cost of equity capital.......14%

Tax rate.....35%

Burgundy is contemplating what for the company is an average risk investment costing $40 million and promising an annual ATCF of $6.4 million in perpetuity.

A. What is the internal rate of return om the investment?

B. What is Burgundy;s weighted average cost of capital?

C. If undertaken, would you expect this investment to benifit share holders? Why or why not?