You have narrowed your selection down to two choices: Project A and project B. The projects' expected net cash flow are as follows: Year 0 1 2 3 4 5 6 7 Expected Net Cash Flow Project A Project B -375 -575 -300 190 -200 190 -100 190 600 190 600 190 926 190 -200 0 8) Assume that the firm has a cost of debt of 7%, a cost of equity of 12%, tax rate of 30%; debt to total assets -0.4. What is the firm's weighted average cost of capital? 9) Assume that the projects are independent and the WACC is 12%; which project would you choose? For the rest of the exercise assume that the projects are mutually exclusive. 10) Assume that the WACC is 12%; which project would you choose? 11) Assuume that the WACC is 18%; which project would you choose? 12) Construct NPV Profile for Project A and B? 13) What is cach project IRR? (Based on the IRR, which project would you choose?). 14) What is the crossover rate and what is its significance? 15) At a WACC of 12% what is the regular and discounted payback period for these two projects? 16) Assume that the firm's number of outstanding shares is 100, what is the expected change in the stock's price? What are the implicit assumptions that you are making for the expected change to realize