Willing to increase price, please provide step by step for solution

Master Chemicals is planning a proposal for manufacturing fertiliser. This project requires an investment of $10 million in plant and machinery. The project is expected to last for 6 years at the end of which the machinery can be sold for $1.949 million. The accountants will have depreciated the equipment over 6 years using a salvage value of $500,000 at the end of year 6 using straight line depreciation. The income statement (in '000s) is shown as below: 0 Capital investment 2 1 3 4 5 10000 6 1949 Accumulated depreciation 1583 3166 4749 Year-End book value 8417 6834 5251 Working capital 550 1289 3261 6332 7915 9500 3668 2085 500 4890 3583 2002 32610 48901 35834 19717 Sales Cost of Goods sold (cash costs) Other cash costs 4000 523 12887 837 7729 19552 29345 21492 11830 2200 1210 1331 1464 1611 1772 Depreciation 1583 Pre-tax profits Tax (35%) 1583 1583 -4097 2365 10144 -1434 828 3550 Profit after tax -2663 1537 1583 6594 1583 16509 11148 4532 5778 3902 1586 7246 2946 1583 10731 The beta of Master Chemicals is 1.2; the risk-free rate is 4% and the market risk premium is 7%. The target capital structure for Master Chemicals is 30% debt and Master Chemicals raises debt at 10% interest rate. Assume the marginal tax rate is 35%. . (a) Compute the cost of equity. . (b) Compute the after-tax cost of debt. . (c) Calculate the weighted average cost of capital. . (d) Calculate the net present value of this project. END OF ASSIGNMENT (6 marks) (4 marks)