1. TAFKAP Industries has three million shares of stock outstanding selling at $17 per share and an issue of $20 million (Face value) in 7.5 percent, annual coupon bonds with a maturity of 15 years, selling at $1060. If TAFKAP's weighted average tax rate is 34 percent and it recently paid a dividend of $1 and has a growth rate of 5%, what is TAFKAP's WACC?
2. ABC is evaluating a capital project that would have an initial cost of $17,446,000. The financial analyst says that the project has a Profitability Index of 1.11. Given that information, what is the Net Present Value (NPV) of the project?