This is a Multiole choice question

1 Acme Computers is considering a new project that costs ofI =$5 million.The project will generate after-tax (year-end) cash flows of$1.5 millionforten years.The firm has a debt-to-equity ratio ofD/E = 3/7.The equity beta for Acme is= 1.5.The expected return on the market isE[R_M] = 10 percentand the risk-free rate isR_F= 4 percent.The before-tax cost of debt isk_D= 11 percent.The corporate tax rate isT = 40 percent.Calculate the weighted average cost of capital(WACC)andtheNPVof this project.

A.11.08%and$3,804,292.71

B.10.257%and$4,115,965.56

C.12.4%and$3,338,344.23

D.11.08%and$8,804,292.71

2 XYZ Corporation is considering a newthree-year expansion projectthat has an initial fixed asset cost of$3 million.The project also requires an initial investment in net working capital of$200,000.The fixed asset will be depreciated straight-line tozero salvage valueover its three-year tax life, after which time it will be worth$175,000(MV₃^New= $175,000).The project is estimated to generate$1,650,000in annual sales, with costs of$650,000.XYZ's corporate tax rate is40 percent. What is the initial investment requirement (I) for this project?

A. $3,000,000

B. $1,650,000

C. $3,200,000

D. $2,800,000