Black Cherry Co. has the following information:

Debt outstanding: $150,000,000

Before Tax Cost of Debt: 6%

Market Cap: $525,000,000

Cost of Common Stock: 12%

Tax Rate: 21%

Black Cherry Co. is evaluating a project with the following information:

Over the next five years EBIT will equal: 15 million, 17 million, 20 million, 22 million, and 25 million respectively.

An investment of $3 million is required in working capital at the beginning of the project, which will be recovered at the end of the project.

The cost of the equipment will be $25 million depreciated using straight line to zero over the projects life, with no salvage value.

The project requires an additional 2% risk premium above the firms WACC.

1) Calculate the WACC for the firm.

2) Calculate the operating cash flows for the first years of the project.

3) Calculate the net present value for the project.