BB Inc. hired you as a consultant to help decide on an expansion project. The project will produce $$8$ million of revenue per year for $9$ years. Cash expenses will be $$3\mathrm{.}8$ million, and depreciation expenses will be $$1$ million per year. The project will increase net working capital by $$120,000$ each year. The firm has a market value of outstanding debt of $$25,000,000$ and $$15,000,000$ in equity. The after$-$tax cost of debt is $5\mathrm{.}5$ percent, and the tax rate is $25$ percent. The cost of equity is $11\%$

$1.$What is the yearly free cash flow on the project? Show all your work.

$2.$ What is the firm's WACC? Show all your work.

$3.$ Should the firm accept this project if it requires an initial investment of $12$ million? Why or why not? Explain using the appropriate equations. show all your work.

$4.$ What is the discounted payback period for this project? Based on this when would the project be acceptable? Explain.

$5.$ Suppose the firms after tax cost of debt increases to $7\%.$ Will this to affect the expansion decision? Why or why not? explain using the appropriate equations. Show all your calculations.