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 looing 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 $7.76 million after taxes. In five years, the land will be worth $8.06 million after taxes. The company wants to build its new manufacturing plant on this land; the plant will cost $13.64 million to build. The following market data on DEl's securities are current: 46,600 6.9 percent coupon bonds outstanding, 21 years to maturity, selling for 93.4 percent of par; the bonds have a $1,000 par value each and make semiannual payments Debt 766,000 shares outstanding, selling for $95.60 per share; the beta is 1.13 36,600 shares of 6.25 percent preferred stock outstanding, selling for $93.60 per 7.05 percent expected market risk premium; 5.25 percent risk-free rate Common stock: Preferred stock: are Market: DEI's tax rate is 34 percent. The project requires $905,000 in initial net working capital investment to get operational Requirement 1 Calculate the project's Time 0 cash flow, taking into account all side effects. Assume that any NWC raised does not require floatation costs. (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).) Initial Time 0 cash flow Requirement 2 The new RDS project is somewhat riskier than a typical project for DEl, primarily because the plant is being located overseas. Management has told you to use an adjustment factor of +3 percent to account for this increased riskiness. Calculate the appropriate discount rate to use when evaluating DEl's project. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Discount rate