4 points Seven different financing plans with their DE mixes and costs of debt and equity capital for a new innovations project are summarized below. Use the data to determine what mix of debt and equity capital will result in the lowest WACC' Debt Capital | | Equity Capital Plan Percentage Rate, % Percentage Rate,% 1 100 17.5 - - 2 70 12.6 30 7.8 3 65 | 11.7 | 35 7.8 4 50 | 11.7 | 50 7.9 5 35 | 10.6 | 65 9.8 6 20 | 8.5 | 80 1215 7 | | 100 1215 DE mix of 9.8 o % 9.8 Q % has the lowest WACC value. 10 points Huntington Medical Center purchased a used lowfield MRI scanner 2 years ago for $445,000. Its operating cost is $475,000 per year and it can be sold for $175,000 anytime in the next 3 years. The Center's director is considering replacing the presently owned MRI scanner with a stateoftheart 3 Tesla machine that will cost $2.5 million.The operating cost ofthe new machine will be $420,000 per year, but it will generate extra revenue that is expected to amount to $675,000 per year. The new unit can probably be sold for $825,000 3 years from now. You have been asked to determine how much the presently owned scanner would have to be worth on the open market for the AW values of the two machines to be the same over a 3year planning period. The Center's MARR is 9% per year The presently owned scanner should be worth $ 119840.55 Q on the open market. 10 10 points Skipped With the estimates shown below, Sarah needs to determine the tradein (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 9% per year. Determine the replacement value. Machine X Machine Y Market Value, $ ? 95,000 Annual Cost, $ per Year 431,500 40,000 for year 1,increasing by 2000 per year thereafter. Salvage Value 14,500 20,000 Life, Years 3 5 eBook Hint References The replacement value is $