Complete Problem 16 in Chapter 12 on Page 414 in the book (Organic Produce Corporation) and the supplement question below (based on your findings).

You must do all of your financial calculations in Excel and prepare a memo in Word. Your memo must addresses each the questions below:

Finding the WACC. Organic Produce Corporation has 6.3 million shares of common stock outstanding, 350,000 shares of 5.8 percent preferred stock outstanding, and 150,000 of 7.1 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $74 per share and has a beta of 1.09, the preferred stock currently sells for $107 per share, and the bonds have 20 years to maturity and sell for 109 percent of par. The market risk premium is 6.8 percent, T-bills are yielding 4.3 percent, and the firms tax rate is 34 percent.
a.	What is the firms market value capital structure?
b.	If the firm is evaluating a new investment project that has the same risk as the firms typical project, what rate should the firm use to discount the projects cash flows?

Answer the 2 questions in Problem 16 (A and B)

Question 3 - In your own words explain how taking on more debt could reduce Organic Produce Corporations cost of capital, potentially leading to the optimal capital structure, but also leading to increased risk to the business.

Question 4 - In your own words explain what working capital management is and give an example of one way Organic Produce Corporations financial managers could improve the companys working capital position.

Question 5 Explain capital budgeting in your own words. Explain one capital budgeting method in detail and how Organic Produce Corporations weighted average cost of capital affects capital budgeting decisions.

You will be graded on correct financial analysis, proper use of technology, and business-like presentation.