Question: Scanlin, Inc. is considering a project that will result in initial aftertax cash savings of $2.1 million at the end of the first year, and

Scanlin, Inc. is considering a project that will result in initial

Scanlin, Inc. is considering a project that will result in initial aftertax cash savings of $2.1 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. The firm has a target debut-equity ratio of 1.00, a cost of debt of 9.6 percent, and a beta of 1.50. The cost-saving proposal is closely related to the firm's core business, so it is viewed as having the same risk as the overall firm. Assume a 34 percent tax rate, return on the market of 8 percent, and the riskless return of 2 percent. Q1. What is the cost of equity? Round your answer to two decimal places. 6 pts. Q2. What is the WACC? Round your answer to two decimal places. 10 pts. Q3. To begin the project, the firm needs to invest $35 million. What is the project's NPV? Round your answer to two decimal places. 10 pts

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