Domremy Drywall Inc. needs to purchase new equipment to better service its client accounts. The cost of the equipment is $175,000. It is estimated that the firm will save $35,000 annually (after tax) for the next 7 years by doing this. The firm is financed with 63% debt and 37% equity, based on market values. The firm's cost of equity is 10% and its pre-tax cost of debt is 6.5%. The flotation costs of debt and equity are 3% and 5%, respectively. Assume the firm's tax rate is 30%.

a. What is the firm's WACC?
b. Ignoring flotation costs and using your answer from part (a) as the discount rate, what is the NPV of the proposed project?
c. What is the weighted average flotation cost, fA, for the firm?
d. What is the dollar flotation cost of the proposed financing?
e. After considering flotation costs, what is the NPV of the proposed project?