The Green Energy company is evaluating an investment of building a new production plant. The cost of the new plant is $500k with an estimated useful life of 10 years. At the end of the project's life, all plant equipment will be removed and sold for $0.2m a year later. The company decides to raise the equity required by issuing common stock onto the share market. The company is listed on the stock exchange with a B value equal to the volatility of the stock market. The company expects to maintain the existing capital structure at a risk free rate of 5% and a risk premium of 8%. Issuing the stock generates a cost of funding the equity of 6%. It is estimated that the annual cash flow generated will be $100k for the first five years increasing to $150K in subsequent years for the remainder of the project. The corporate tax rate in Australia is 30%. The capital structure is such that the company has a 25% debt ratio. The cost of the debt capital is 9% whereas the cost of funding the debt raised is 4%. a) Draw the cash flow diagram that represents the above investment scenario. [2 MARKS] b) Calculate the WACC. [8 MARKS]