Type $1$D: Here is a book balance sheet for Parker Associates. Figures are in miliions.

Assets

Liabilities and Shareholders' Equity.

Assets $($book value$)$ $$100$

Debt

$$40$

Equity

$$60$

$2$

$$100$

$$100$

Unfortunately, the company has fallen on hard times. The $6$ million shares are trading for only $$5$ apiece, and the market value of its debt securities is $508$ below the face $($book$)$ value. Suppose shareholders now demand a $25\%$ expected rate of return. The bonds are now yielding $158.$

a$.$ What is the firm's weighted$-$average cost of capital if the firm's tax rate is $34\%?$

b$.$ If the company considers a normal project whose risk is about the same as the company's risk with an internal rate of return of $17\%,$ should it accept the project? Why or why not?