Last time I submitted this question everything was right besides the Net Present Value.

10. value: 1.60 points Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. The company bought some land three years ago for $7 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. If the land were sold today, the net proceeds would be $7.65 million after taxes. In five years, the land will be worth $7.95 million after taxes. The company wants to build its new manufacturing plant on this land; the plant will cost $13.2 million to build. The following market data on DEI's securities are current: 45,500 6.8 percent coupon bonds outstanding, 20 years to maturity, selling for 94.5 percent of par, the bonds have a $1,000 par value each and make semiannual payments Debt Common stock: 755,000 shares outstanding, selling for $94.50 per share; the beta is 1.25 Preferred stock: 35,500 shares of 6.2 percent preferred stock outstanding, selling for $92.50 per share. Market: DEI's tax rate is 35 percent. The project requires $850,000 in initial net working capital investment to get operational. 7 percent expected market risk premium; 5.2 percent risk-free rate a. Calculate the project's Time 0 cash flow, taking into account all side effects. Assume that any NWC raised does not require floatation costs. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Time O cash flow 217000 b. The new RDS project is somewhat riskier than a typical project for DEI, primarily because the plant is being located overseas. Management has told you to use an adjustment factor of +1 percent to account for this increased riskiness. Calculate the appropriate discount rate to use when evaluating DEl's project. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Discount rate 11.48 %