Please show all the work for this question to earn a thumbs-up or show all the steps on the calculator with formulas written.

The financial manager of HW is considering a project. It will produce just one cash flow in year 1, but with some uncertainty. It has a 10% chance to generate $8 million in year 1, 60% of the opportunity to generate $3 million, and 30% to generate $0. The project requires a $2.5 million investment today. The project has the average risk level of the company. You also have some information on the company. HWs cost of debt is 4.5%. A beta of debt is 0.2. The average estimate for the beta of HWs industry is 1.5, with a standard error of 0.3. The ratio of debt to overall company value is 20%. Assume market return based on historical data is 9%, the risk-free rate is 0.5%, and the corporate tax rate is 21%.

(a). Whats the cost of equity for company HW by using the CAPM model? (keep four decimals) [12 points]

(b). Whats the after-tax WACC of HW? (keep four decimals) [18 points]

(c). Whats the NPV of the project based on your answer in (a) and (b)? (keep four decimals) [24 points]

(d). Should the financial manager take the project and why? [4 points]