Mary Francis has just returned to her office after attendingpreliminary discussions with investment bankers. Her last meetingregarding the intended capital structure of Apix went well, and shecalls you into her office to discuss the next steps. "We will needto determine the required return for our intended project so thatwe have a decision criteria defined for the project," she says. "Doyou have the information I need to describe capital structure andto calculate the weighted average cost of capital (WACC)?" you ask."I do," she smiles. "We can determine the target WACC for ApixPrinting Inc., given these assumptions," she says as she hands youa piece of paper that says the following: Weights of 40% debt and60% common equity (no preferred equity) A 35% tax rate Cost of debtis 8% Beta of the company is 1.5 Risk-free rate is 2% Return on themarket is 11% "Great," you say. "Thanks." "Be sure to indicate howthese costs of capital might be used to determine the feasibilityof the capital project," Mary says. "I want your recommendationabout which is more appropriate to apply to project evaluation,too. Let me know what you think." "One more thing," she says as shestands up to signal the end of the meeting. "You did a good jobwith the explanations that you provided Luke the other day. Wouldyou have time to define marginal cost of capital for me so I caninclude it in my discussions with investors? You seem to have aknack for making things accessible to nonfinancial folks." "Noproblem," you say. "I'm glad my explanations are so useful!" Forthis assignment, complete the following: Describe capitalstructure. Determine the WACC given the above assumptions. Indicatehow these might be useful to determine the feasibility of thecapital project. Recommend which is more appropriate to apply toproject evaluation. Define marginal cost of capital. Please submityour assignment. For assistance with your assignment, please useyour text, Web resources, and all course materials. CourseObjectives: Assess the cost of capital and marginal cost of capitaland their implications for capital budgeting. Compare and contrastalternative valuation methodologies and explain how a firm canmaximize its value.