You were hired as a consultant to Star LLC which is considering taking a project that will produce $$8\mathrm{.}5$ million of revenue per year for eight years. Cash expenses will be $$5$ million, and depreciation expenses will be $$1\mathrm{.}5$ million per year. If the firm takes that project $,$ then it will reduce the cash revenues of an existing project by $$1\mathrm{.}2$ million. You were also told that Star$$s target capital structure is $40$ percent debt, $15$ percent preferred $,$ and $45$ percent common equity. The cost of debt is $4$ percent, the cost of preferred is $12$ percent, and the cost of common equity is $9$ percent $.$ Star uses a $25$ percent marginal tax rate

$1.$ What is the yearly free cash flow on the project?

$2.$ What is the firm's WACC?

$3.$ Should the firm accept this project if it requires an initial investment of $10$ million? Why or Why not? Explain.

$4.$ What is the profitability index of this project?

$5.$ Suppose the firm decides to shift its capital structure in favor of more debt and less equity. Specifically $,$ suppose it switches to $60\%$ debt, $10\%$ preferred and $30\%$ common equity. How should this affect their decision to accept the project if any? Why? Or why not?