You were hired to evaluate Frost Inc's expansion project. Suppose that Frost expects the project's cash flow from operations to be $$90,000$ for $5$ years. The project will also require additional capital expenditures of $$30,000$ every year. You were also told that the firm last paid a $$2\mathrm{.}1$ dividend $(D0=$$$2\mathrm{.}1).$ The dividend is expected to grow at a constant rate of $5$ percent a year, and the common stock currently sells for $$37$ a share. The after$-$tax cost of debt is $6\mathrm{.}5$ percent, and the tax rate is $25$ percent. Frost's target capital structure consist$5$ of $60$ percent debt and $40$ percent common equity.

What is the yearly free cash flow on the expansion project? Show all your work.

What is the company's WACC? Show all your work.

If the project's initial investment is estimated at $$150,000,$ should Frost expand? why? Explain using the appropriate equations. Show all your work.

What is the profitability index for this project? Show all your work.

Suppose that due to some bad economic news, Frost's stock price decreases to $$25$ per share. Would this affect their expansion decision? Why or why not? Show all your work.

Show all your work. Explain all your answers using the appropriate equations $($not just calculator functions$).$ Your explanation determines your grade!