5. A project that requires an initial investment of $650,000s expected to have the following net after-tax cash flows: Year Cash Flow WACC 1 $250,000 2 $250,000 3 $180,000 4 $140,000 2 3 5 $140,000 9,47% 5 - 650.000 25000 25000 180000 140000 140700 -2100.00 T 1500 Additionally, during the third year they will have to pay $210,000 for overhaul and recertification of the equipment, and at the end of the fifth year, they can sell the used machinery for $25,000 to close out the project. The company finances all debt at 6.50% interest. Common stock currently sells for $21.00 per share, and the last annual dividend paid was $2.20. Dividends grow at 2.0% each year. Their marginal tax rate is 24%, and their average tax rate is 22.85%. To help buy the investment, they will issue $200,000 of new Preferred Stock, at a price of $28.00 per share, and a dividend of $2.00. Flotation costs for new preferred stock are 4.0%. Part of the company's most recent Balance Sheet looks like this: LIABILITIES Total Liabilities 550,000 OWNERS EQUITY Common Stock 300,000 Preferred Stock 200,0 Retained Earnings 600,000 2.04. Draw an excellent timeline, and then calculate the project's: a) Payback Period (projects of this size and risk level must pay back within 4 years); b) WACC c) NPV d) PI e) MIRR What decisions do each have you make? Compare them, and for each, comment on what information that method adds to your understanding of this project for the company. Tell what decision each method leads you to, and then what your decision would be, and give the reasonings for all ant SOA