This is another case analysis. It has four major questions that needs to be answered according to the Chapter, which will be provided below.

Cost of CapitalImportant: Turnitin is active. Turnitin score greater than 25% will be investigated. In addition, you may lose points if your Turnitin score is greater than 25%. Cost of CapitalIn the links below, you will explore how companies compute their cost of capital by computing a weighted average of the three major components of capital: debt, preferred stock, and common equity. The firm's cost of capital is a key element in capital budgeting decisions and must be understood in order to justify capital projects. Cost of Capital For this Discussion, imagine the following scenario:You are the director of operations for your company, and your vice president wants to expand production by adding new and more expensive fabrication machines. You are directed to build a business case for implementing this program of capacity expansion. Assume the company's weighted average cost of capital is 13%, the after-tax cost of debt is 7%, preferred stock is 10.5%, and common equity is 15%. As you work with your staff on the first cut of the business case, you surmise that this is a fairly risky project due to a recent slowing in product sales. As a matter of fact, when using the 13% weighted average cost of capital, you discover that the project is estimated to return about 10%, which is quite a bit less than the company's weighted average cost of capital. An enterprising young analyst in your department, Harriet, suggests that the project is financed from retained earnings (50%) and bonds (50%). She reasons that using retained earnings does not cost the firm anything since it is cash you already have in the bank and the after-tax cost of debt is only 7%. That would lower your weighted average cost of capital to 3.5% and make your 10% projected return look great.Based on the scenario above, post your reactions to the following questions and concerns:What is your reaction to Harriet's suggestion of using the cost of debt only? Is it a good idea or a bad idea? Why? Do you think capital projects should have their own unique cost of capital rates for budgeting purposes, as opposed to using the weighted average cost of capital (WACC) or the cost of equity capital as computed by CAPM? What about the relatively high risk inherent in this project? How can you factor into the analysis of the notion of risk so that all competing projects that have relatively lower or higher risks can be evaluated on a level playing field?Instructions:1. Post your initial/main response to later Sunday, October 25 at 11 PM EST2. Read and respond to at least 3 of your classmates. Below are suggestions on how to respond to your classmates’ discussions:a. Ask a probing question, substantiated with additional background information, evidence, or research.b. Share an insight from having read your colleagues’ postings, synthesizing the information to provide new perspectives.c. Offer and support an alternative perspective using readings from the classroom or from your own research.d. Validate an idea with your own experience and additional research.e. Make a suggestion based on additional evidence drawn from readings or after synthesizing multiple postings.f. Expand on your colleagues’ postings by providing additional insights or contrasting perspectives based on readings and evidence

Task 5: Draft Research Concept This is a narrative assignment. You will post your submission as a word document. Use APA formatting for the word document. Your submission will include the following: Title Block  Last Name, First Name  Cognate  Research Project Track (Dissertation or Project)  Research Paradigm  Planned Research Design  Proposed Topic Table of Contents Research Concept (Level 1 Heading)  Start a new page  Introductory paragraph for the research concept Problem Statement (Level 2 Heading)  Convert the bullet point outline into a single paragraph with less than 250 words  Citations to support all factual assertions Research Questions (Level 2 Heading)  Create an introductory paragraph  List the research questions and sub-questions (if used). Use labels RQ1, RQ1a, etc.  Describe how the research questions relate to the problem statement  Describe how taken together the research questions cover all elements of the problem statement.  Summary paragraph  Citations to support all factual assertions Methodology (Level 2 Heading)  Create an introductory paragraph  Discussion of Research Paradigm and how it will influence the study  Discussion of Methodology and why it is appropriate for the study  Summary paragraph  Citations to support all factual assertions Research Framework (Level 2 Heading)  Create an introductory paragraph  Add a diagram right after the introductory paragraph showing the relationship between all the elements included in the framework and discuss the diagram throughout this section. The diagram should show the flow of information, action, and ideas that lead to outcomes.  Convert the bullet point outline into a narrative discussion. Use appropriate headings.  Create a summary paragraph  Citations to support all factual assertions Conclusion (Level 2 Heading)  Summary of research concept  Key points of research concept References (Level 1 Heading)  APA formatted reference for all citations in the research concept