Your company is considering a $1,200,000 capital project that will generate a before tax cash flow of $400,000 for each year of the projects 6-year lifespan. The weighted average cost of capital is 14%. The floatation cost for equity is 6% and for debt is 3%. The companys target D/E ratio is 0.5 and its income tax rate is 30%.

Calculate the following returns: (1/100 of one percent without % sign, e.g., 12.671, if a negative percentage, -9.56). For dollar amounts, record to the nearest dollar with no dollar sign, e.g., 45986, if negative, -45986). Do not round your percentage calculations prior to entry into the spaces below.

1. Weighted average floatation cost (%): Answer

2. True cost of the project ($): Answer

3. NPV ($): Answer