You are considering an investment in copper mines in Canada. Your expectations are that you will take losses eventually, but once infrastructure is built, the project will become more profitable very quickly. You have estimated that the initial revenues will be$$100$ mm in the first year and will grow at a rate of $45\%$ per year for the next three years $($Due to political risks, you decide to use only a four$-$year horizon for planning purposes$).$ Variable costs are expected to be $70\%$ of sales; fixed costs are projected to be $$10$mm per year. Initial cost of machinery, land, equipment and other things amounts to $$110$mm$.$ This $$110$mm will be

depreciated straight$-$line to zero over a seven year accounting life. However, the expected market value of the fixed assets at the end of four years is $$50$mm$.$ Net working capital requirements are minimal, just $$10$mm at the beginning of the project, all of which will be recovered at termination. Tax rate of your company is $30\%.$

This project will be financed with both debt and equity. The plan is to mirror the firm$$s target capital structure by issuing $15$million shares of stock priced at $$10\mathrm{.}00$ a share and $$170$mm face value of $10-$year bonds which will be priced at $94\%$ of par if a coupon of $7\%$ is offered to investors. The company will pay dividends of $$3\mathrm{.}60$ per year $($starting in one year$),$ and increase the dividend by $4\%$ per year indefinitely. Treasury bills offer $1\%$ return and the expected market returns are $11\%$ per year. The stock$$s beta is $1\mathrm{.}8.$ Assume flotation costs are $6\%$ for debt and $18\%$ for equity, and are incurred only for the $$100$mm outlay for fixed assets. Create an Excel template where all the necessary calculations are made. All the questions should be work in Excel

$$ What are the cash flows each year from this project?

$$ What is the WACC?

$$ What is the total initial cost after adjusting for flotation costs?

$$ What are the NPV$,$ IRR, PI and simple $($not discounted$)$ payback period for the project?

$$ WILL YOU ACCEPT THE PROJECT OR NOT? WHY $($OR WHY NOT$)?$