Suppose you have been hired as a financial consultant to Defense Electronics, Inc (), a large, publicly traded firm that is the market share leader in radar detection systems (). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year projectThe company bought some land three years ago for $5.3 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 insteadThe was appraised last week for $million. In five years, the aftertax value of the land will be $6.5 million, but the company expects to keep the land for a future project. The company wants to build its new manufacturing plant on this fandthe plant and equipment will cost $3264 million to build following market data on securities is current : Debt Common stock 119,000 7 percent coupon bonds outstanding, 23 years to maturity selling for 107 percent of parthe bonds have a par value of $and make semiannual payments. 9,600,000 shares outstanding, selling for $71.80 per share the beta is 13 458,000 shares of 5 percent preferred stock outstandingselling for $81.80 per share and having a par value of $100. 6 percent expected market risk premium: 3.9 percent risk-free rate. DEI uses GM Wharton as its lead underwriterWharton charges DEI spreads of 75 percent on new common stock issues, percent on new preferred stock issues, and 5.5 percent on new debt issues. Wharton has included all direct and indirect issuance costs (along with its profit) in setting these spreadsWharton has recommended to DEI that it raise the funds needed to build the plant by issuing new shares of common stock tax rate is 23 percent. The project requires \$1,500,000 in initial net working capital investment to get operationalAssume Wharton raises all equity for new projects externally a. Calculate the project's initial Year O cash flow, taking into account all side effects. Assume that the net working capital will not require flotation 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, rounded to the nearest whole dollar amount, e.g., 567.) b. The new RDS project is somewhat riskier than a typical project for DEIprimarily 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 project. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16 .) c. The manufacturing plant has an eight-year tax life, and DEI uses straight-line depreciation. At the end of the project (that is, the end of Year 5)the plant and equipment can be scrapped for $millionWhat is the aftertax salvage value of this plant and equipment(Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar amount, e.g. 1,234,567. d. The company will incur $7,600,000 in annual fixed costsThe plan is to manufacture 21, 000RDSs per year and sell them at $11,200 per machine the variable production costs are $9.800 per RDS. What is the annual operating cash flow...