Assume Pepsi firm is considering an investment that would extend the life of one of its facilities for 5 years. The project would require upfront costs of $8M plus $42M investment in equipment. The equipment will be obsolete in 5 years and will be depreciated via straight-line over that period (Assume that the equipment can't be sold). During the next 5 years, Pepsi expects annual sales of 60M per year from this facility. Material costs and operating expenses are expected to total 37M and 8.8M, respectively, per year. Pepsi expects no net working capital requirements for the project, and it pays a tax rate of 39%. Pepsi has 73% of Equity and the remaining is in Debt. If the Cost of Equity and Debt are 11% and 6% respectively, should they take the project?

Answer the following: a) WACC (in percentage, thus 3.8% must be entered as 3.8);

b) Incremental FCF at 0;

c) Incremental FCF from year 1 to year 5;

d) NPV. All dollars answers must be submitted in Millions, thus 4.56M must be entered as 4.56. Round to the second decimal in each case.

Units are not necessary in any of the answers.