Question 1 (A) Fara is evaluating a new project that costs R45,000. The project will be financed using 60 % equity and 40 % debt, thus maintaining the company's current debt-to-equity ratio. The company's shareholders have a required rate of return of 18.36% while bondholders expect a 10.68 % rate of return. The project is expected to generate annual cash flows of R13,000 before taxes for the next two decades. The applicable tax rate for the company is 36%. (i) Calculate the traditional net present value of the project. Should the project be undertaken? (B) A company has 1,000,000 shares outstanding, and each share is currently worth R20. The shares have beta of 1.2. The company also has 10-year bonds outstanding with a par value of R10,000,000, a coupon rate of 6%, and yield-to-maturity of 7%. The yield on the bonds is currently 2 percentage points above the risk-free rate and 4 percentage points below the expected return on the overall market. (i) What is the company's WACC if the corporate tax rate is 35%