The firm's cost of equity capital is 18%, the market value of the firm's equity is $8

Question:

The firm's capital is 18%, the market value of the firm's equity is $8 million, the firm's capital is 9%, and the market value of debt is $4 million. The firm is considering a new investment with an expected rate of return of 17%. This project is 30% riskier than the firm's average operations. The riskless rate of return is 5%; the variance of the market return is .08. Is the project profitable? (Assume a world without taxes.)
Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking... Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...