Your friends and you have decided to invest in a one-year high-tech project that requires $1,000,000 investment. The $1 mil will be used to buy a machine that costs $1 mil. Your friends and you will come up with equity of $600,000, and borrow the rest to buy the machine. The machine will be depreciated over a five-year useful life. Use straight-line depreciation method. Salvage value after one year assumed equals net book value. The revenue expected at the end of year one is $2 mil. The operating expenses are $1 mil. The corporate tax rate is 20%. The required return on equity is 15%. Interest rate on borrowing is 10%. Assumptions: All accounts where relevant are in cash (no adjustments for changes in net working capital). Your firm decides to start the project. There is only one project for your firm. Value of an asset, unless otherwise stated, is taken to be as of today

What is the weighted average cost of capital? A. 12.56% B. 12.79% C. 12.83% D. 13.06% E. 13.69%