A firm producing digital cameras considers a new investment which is about opening a new plant.

The project$$s lifetime is estimated as $5$ years and requires $20$ million TL as investment cost. Salvage value of the project is estimated as $4$ million TL $($which will be received in the sixth year$).$ However, firm prefers to show salvage value only as $2$ million TL$.$ Firm uses $5-$year straight line depreciation.

It is estimated that the sales will be $12$ million TL next year and then sales will grow by $20\%$ each year. It is estimated that total costs will be $25\%$ of sales. Corporate tax rate is $20\%.$

This project, in addition, requires a working capital of $3$ million in the first year, $4\mathrm{.}5$ million in the second year, $5\mathrm{.}5$ million in third year, $3\mathrm{.}5$ million in the fourth year and $2$ million in the fifth year.

Firm plans to use a debt$/$equity ratio of $50\%$ in this project.

The company can borrow TL loan with an interest cost of $22\%$ before tax. Corporate tax rate is $20\%.$ Beta of the company is $0\mathrm{.}9.10-$year Turkish government bond yields at $20\%$ and market risk premium is $10\%.$

Given this information, find the NPV of this project. Is this project feasible or not?

What is the result of higher WACC? Can a company reduce its WACC? If yes, how? Explain this topic briefly regarding to the capital structure theories.