WindMill Ltd. is a Spanish transportation and distribution company focused on the transportation of food to supermarkets. Calefull, a supermarket company, is one of WindMill's largest customers and has proposed a new contract to the company. The contract means that WindMill will be Calefull's partner for the transport of the new supermarkets located in the south of Spain for the next 5 years. The contract includes an annual payment of €4,500,000 to WindMill

WindMill is evaluating the contract and has estimated that they will need 20 new trailers to carry out the contract. Each trailer truck costs €140,000 and the residual value after five years will be €40,000. The company will apply the straight-line depreciation method over time. Each truck will travel 150,000 km/year. Estimated diesel consumption is 0.33l/km. Years two and four will require special maintenance that will cost €10,000 per truck (each year mentioned). The price of diesel is estimated at €1.33/l throughout the contract, the other operating costs will be €0.15/km. Therefore, the company is going to hire 20 new drivers who will cost €30,000 a year each. .

The commercial terms assume that WindMill will invoice the contract year monthly (1/12) and give credit to the customer for 3 months. The tax rate is 24%. Inflation is 0% throughout the life of the contract The WACC is 20% 

1.-Estimate the cash flows (low annual) to the company

2.- Calculate the NPV of the contract 

3.- Calculate the IRR of the contract the contract