1. The BeanBean Corporation is considering the introduction of a bean salsa to the market. You are an equity analyst and you are trying to estimate the value of this project to the company. You are aware of the following information. Which of the following is NOT relevant to determining whether to take the project?

BeanBean pays $24,500 per year in rent for their factory which currently operates below maximum capacity.

The introduction of bean salsa will cause sales of beany-guacamole to decline by $13 per year in each of the following years.

BeanBean will have to build several new production lines in the existing factory before the end of 2019, and the estimated capital expenditure will be $67,000.

Operating costs will be 1/3 of each year's revenues.

BeanBean expects the sales of the new product to be $92,000 in 2020

2. Selma's Sushi is trying to decide whether to invest in a new line of business selling premade sushi in the refrigerated section at grocery stores. Assume that their capital structure consists of 38% common stock, 12% preferred stock, and 50% debt. Further, analysts predict that their future cost of debt will be 4% and their cost of preferred stock is 11%. We also know that the current price of common stock is $26 and that the common stock is expected to pay a $1.50 dividend each year. The firm's tax rate is 22%. What is this firm's WACC?

6.92%

5.07%

None of these

5.77%

5.51%