Need help figuring out this homework problem.

Great Lakes Aviation is evaluating the proposed acquisition of new baggage sorting equipment. The price of the new equipment is $240,000. Installation will cost $26,000. This equipment falls into the MACRS 3-year class. (MCRS rates for three-year property: Year 1-33%; Year 2-45%; Year 3-15%; Year 4-7%) The equipment will be sold after three years and the estimated selling price is $110,000. This equipment will require an increase in NOWC of $7,500. While the equipment will have no impact on company revenue, it will provide an estimated pre-tax labor savings of $75,000 per year. Great Lakes has a current tax rate of 26%.

1. What is the Year 0 net cash flow?

2. What are the net operating cash flows for years 1, 2, ad 3? Year 1 Year 2 Year 3

3. What is the terminal year cash flow?

4. The companys finance department estimates the risk-free rate to be 3%, the market risk premium to be 6%, and the companys beta at 1.3. The companys 15-year bonds sell for $1,220.68. The coupon is 10%. The companys target capital structure is 60% equity and 40% debt. What is the companys WACC?

5. What is the companys NPV and MIRR for this project. Should the company purchase the equipment?