You are the manager at K&B Inc. You have been told that the company has an opportunity to expand into a new market, but will need to make a major investment to do it. XXXXX XXXXX, Division Vice-President, ask you to evaluate the different opportunities and complete a report for her including your recommendation on which expansions to do (using the methods discussed in the course for capital budgeting). The table below contains the information for each project. Assume all the information given to you is accurate and all three expansions have the same risk. Options for capital structure (determine the WACC and choose the best capital structure for the project): 1. 35% debt at 10% with tax-rate of 40%; no preferred stock; 65% common stock at 15% or 2. 50% debt at 11% with tax-rate of 40%; no preferred stock; 50% common stock at 15%. Total available funds the company can raise for the expansion(s) is $10,000,000. The expansions cash flows are as follows: Expansion Florida Georgia Alabama Initial Cost -10,000,000 -10,000,000 -10,000,000 Year 1 Cash Flow 1,690,000 3,850,000 0 Year 2 Cash Flow 1,690,000 3,000,000 0 Year 3 Cash Flow 1,690,000 2,500,000 725,000 Year 4 Cash Flow 1,690,000 2,000,000 800,000 Year 5 Cash Flow 1,690,000 1,000,000 900,000 Year 6 Cash Flow 1,690,000 700,000 2,000,000 Year 7 Cash Flow 1,690,000 0 3,000,000 Year 8 Cash Flow 1,690,000 0 4,000,000 Year 9 Cash Flow 1,690,000 0 5,000,000 Year 10 Cash Flow 1,690,000 0 6,000,000 After your evaluation, write a memo (in word) to XXXXX XXXXX indicating your recommendation. In the memo, you should indicate the rank of the projects, which projects are viable, then you should indicate which project(s) you recommend. The memo is required to be in proper business memo style. You should submit the memo and your excel file to blackboard. (I have to see the formulas – not just the answers to be given full credit. Reminder: +5 pts bonus if you can calculate the discounted payback for all three states