XYZ Co. has the following information:

Debt outstanding: $150 million

Before tax cost of debt: 6%

Market cap: $525 million

Cost of common stock: 12%

Tax rate: 21%

XYZ Co. is evaluating a project with the following information:

Over the next five years EBIT will equal: 15 million, 17 million, 20 million, 22 million, 25 million respectively.

An investment of $3 million is required in net working capital at the beginning of the project, which will be recovered at the end of the project.

The cost of the equipment will be $25 million depreciated using straight-line to zero over the projects life, with no salvage value.

The project requires an additional 2% risk premium above the firms WACC.

a) What is the WACC for the firm? Enter percentages as decimals and round to 4 decimals

b) What are the operating cash flows for the first year of the project? Enter percentages as decimals and round to 4 decimals

c) What is the net present value for the project? Enter percentages as decimals and round to 4 decimals