Mistletoe Unlimited has 1,100 bonds outstanding that are selling for $992 each. The bonds carry a 6.0 percent coupon, pay interest semi-annually, and mature in 7.5 years. The company also has 9,500 shares of 5% preferred stock at a market price of $40 per share. This month, the company paid an annual dividend in the amount of $1.20 per share. The dividend growth rate is 5.0 percent. The common stock is priced at $30 a share and there are 34,500 shares outstanding. The company is considering a project that is equally as risky as the overall company. This project has initial costs of $630,000 and operating cash flows of $150,000 a year for the next 10 years and salvage value of $10,000 at the end of 10 years. No change in the NWC. The project will be depreciated straight-line to zero over the project's 10-year life. The tax rate is 34%.

A. What is Mistletoe's weighted average cost of capital?

B. What is the net present value (NPV) of this project? Should you accept the project? describe why.