Mind$-$bending Inc. is considering the acquisition of a new piece of equipment. The machine's price is $$900,000.$ In addition, an installation cost of $$35,000$ and transportation cost would be $$60,000.$ It would require $$35,000$ in spare parts thus increasing the firm's net working capital by that amount. The system falls into the MACRS $3-$year class $($depreciation rates of $33\%,45\%,15\%,$ and $7\%).$ The current machine it would replace could be sold for $$135,000$ and currently is being carried on the books for $$30,000.$ That amount is scheduled to be fully depreciated for tax purposes next year if the new machine is not purchased. It is estimated that the new equipment would increase productivity and thus increase the firm's before$-$tax revenues by $$225,000$ per year. It would also reduce operating costs by $$27,000$ per year because of its greater speed and efficiency. The equipment is expected to be used for $7$ years and then be sold for $$45,000.$ The firm's marginal tax rate is $26\%.$ The company is currently financed in the following fashion:Debt: $65,000$ bonds outstanding $($$$1,000$ face or par value$)$ with an $7\%$ coupon, $15$ years to maturity, selling for $106$ percent of par; the bonds make semiannual payments.Common Stock: $700,000$ shares outstanding, selling for $$65$ per share; the beta is $1\mathrm{.}2.$Preferred Stock: $80,000$ shares outstanding $($$$100$ par value$),$ it pays a $10\%$ dividend on par, and it is selling for $$125$ per share.Market: The expected return on the market portfolio is $10\%$ and the risk$-$free rate is $2\%.$Calculate the firm's current capital structure $($wd$,$ we$,$ wps$)$:Calculate the firm's before$-$tax cost of debt financing:Calculate the firm's cost of equity financing:Calculate the firm's cost of preferred stock financing:Calculate the firm's WACCWhat is the initial outlay for the project?Calculate the change in depreciation for each year.Calculate the operating cash flows for each year.What is the salvage value for the project?Summarize the net cash flows for each year beginning with the initial outlay.Calculate the project's NPV and IRR$\mathrm{.}1.$ Explain why the firm should either accept or reject this project.