Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, pubicy 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 milion 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 so d today, the net proceeds would be $7.75 million after taxes. In five years, the land will be worth $8.05 million after taxes. The company wants to build its new manufacturing plant on this land, the plant will cost $13.6 million to build. The following market data on DEr's securities are current 46.500 6.8 percent coupon bonds outstanding. 20 years to maturity, seling fr 93.5 percert of par; the bonds have 1.000 par value each and make semiannual payments. Debl Common stock: 765,000 shares outslanding, seling for S95.50 per share; the beta is 1.14 Preferred stock: 36,500 shares of 6.2 percent preferred stock outstanding, seling for $93.50 per share. Market DEr's tax rate is 35 percent. The project requires $900,000 in inital net working capital investment to get operatonal 7 percont expected market risk premium; 5.2 percent risk-free rate Calculate the project's Time 0 cash flow, taking into acoount all side effects. Assume that any NWC ra sed does not require floatation costs. (A nogativo answer should be indicated by a minus sign. Do not round intermediato calculations and onter your answer in dollars, not millions of dollars, o.g., 1,234,567.) Time 0 cash fow 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+2 percent to account for this increased riskiness. Calcu late the appropriate discount rate to use when evaluating DErs project. (Do not round intermediate calculations and entor your answer as a percent rounded to 2 decimal placos, o.g., 32.16.) Discount rate The manufacturing plant has an eight-yoar tax life, and DEl uses straight-line depreciation. At the end of the project (i.e., the end of Year S), the plant can be scrapped for $1.65 million. What is the aftertax savage value of this manufacturing plant? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Aftertax salvage value d. The company will incur $2,450,000 in annual fixed costs. The plan is to manufacture 14,500 RDSs per year and sell them at $11,900 per machine, the variable production costs are $11,100 per RDS. What is the annual operating cash flow, OCF, from this projecr? Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Operating cash fow 0. Calculate the projects net present value. (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g, 32.16.) Net present value Calculate the projects internal rate of retun. (Do not round intormediate calculations and enter your answer as a percent roundod to 2 decimal placos, e.g, 32.16.) Internal rate of return