Barbie and Ken Company needs to purchase new plastic moulding machines to meet the demand for its product.The cost of the equipment is $100,000.It is estimated that the firm will increase operating cash flow(OCF) by $22,000 annually for the next seven years.The firm is financed with 40% debt and 60% equity, both based on market values.The firm's cost of equity is 16% and its pre-tax cost of debt is 8%.The flotation costs of debt and equity are 2% and 8%, respectively.Assume the firm's tax rate is 34%.

1. What is the WACC?

2. What is the NPV of the Proposed Project.