Weighted Average Cost of CapitalA publicly owned company, RD Incorporated has a Debt Ratio of 55%

Part I: Weighted Average Cost of CapitalA publicly owned company, RD Incorporated has a Debt Ratio of 55%The debt has an annual interest rate on the financing of 6.5%The firm has a corporate tax rate of 30%The equity position (cost) is determined by the Capital Asset Pricing Model. Currently themarket has the following:Risk Free Rate = 3.75%S&P 500 Market return = 10.5%RD Incorporated’s Beta = 1.85Please determine the firm’s current WACC.____________________________________________________________________________________________________Part II: Capital Budget AnalysisThe firm has a project decision to make, as a finance analyst you have been asked toapprove or reject the project.Here are the following project inputs:Equipment Investment = $500,000Term of the project = Ten YearsWACC = from Part IAnnual Net Operating Cash Flow = $85,000Please determine the Net Present Value (NPV), Internal Rate of Return (IRR), ProfitabilityIndex (PI) and the years Payback of this project.Would you reject or approve of the project?