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 $7.68 million after taxes. In five years, the land will be worth $7.98 million after taxes. The company wants to build its new manufacturing plant on this land; the plant will cost $13.32 million to build. The following market data on DEIs securities are current:

Debt: 45,800 7.1 percent coupon bonds outstanding, 19 years to maturity, selling for 94.2 percent of par; the bonds have a $1000 par value each and make semiannual payments.

Common stock: 758,000 shares outstanding, selling for $94.80 per share; the beta is 1.28.

Preferred stock: 35,800 shares of 6.35 percent preferred stock outstanding, selling for $92.80 per share.

Market: 7.15 percent expected market risk premium; 5.35 percent risk-free rate.

DEI's tax rate it 38 percent. The project requires $865,000 in initial net working capital investment to get operational.

See picture for requirements. The answers shown were provided to me by someone else on here and they are incorrect.