Problem:
A firm is considering a $200,000 project that will last 4 years and has the following financial data:
After tax cash inflows are expected to be $75000
Target debt/equity ratio is 0.40
The cost of equity is 12%
The cost of debt is 8%
The firm's marginal tax rate is 30%
Required:
Question 1: Calculate weight of debt and weight of common stock
Question 2: Calculate WACC
Question 3: Calculate the project's NPV
Question 4: Calculate the project's IRR
Note: Please explain comprehensively and give step by step solution.