QUESTION 3 What is the NPV of the new machine project? The project would require an initial investment in equipment of $67,000 and would last for either 3 years or in 4 years (the date when the project ends will not be known until it happens and that will be when the equipment stops working in either 3 years from today or 4 years from today). Annual operating cash flows of 521.000 per year are expected each year until the project ends in either 3 years or 4 years. In 1 year, the project is expected to have an after-tax terminal value of $48,000. The cost of capital for this project is 14.5 percent. a. -$18,652 (plus or minus $100) b. -$12.513 (plus or minus 5100) C.-56,738 (plus or minus $100) d. -56,434 (plus or minus $100) e. None of the above is within $100 of the correct answer QUESTION 4 The expected return on the market is 15.49%, the risk free rate is 3.49%, and the tax rate is 30%. Berkeley Studios has 750.000 common shares outstanding that are priced at $14.00 per share and have an expected return of 16.11% and an expected real return of 14.84%. Last year, Berkeley Studios common stock had a return of 21.819. The company also has 200.000 shares of preferred stock outstanding that are priced at $20.50 per share and have an expected return of 12.38% and an expected real return of 11.15%. Last year, Berkeley Studios preferred stock had a return of 14.99%. Finally, the company has 15.000 bonds outstanding with a coupon rate of 9.87%, yield-to-maturity of 7.359, current yield of 9.35%, face value of $1.000, and price of $1.060. What is the weighted average cost of capital for Berkeley Studios? a. 9.89% (plus or minus 0.05 percentage points) b. 9.29% (plus or minus 0.05 percentage points) c. 10.61% (plus or minus 0.05 percentage points) d. 10.81% (plus or minus 0.05 percentage points) e. None of the above is within 0.05 percentage points of the correct