Please ONLY answer sections A, D and F. In other words, I needto know: Project’s Initial Time 0 Cash Flow, Operating Cash Flow,IRR, NPV. The other questions (B, C, and E) have been done and arecorrect.

**There are other answers for this exact same problem on Chegg,but they are incorrect. Please help! I don't understand thisproblem and it is driving me crazy.

Suppose you have been hired as a financial consultant to DefenseElectronics, Inc. (DEI), a large, publicly traded firm that is themarket share leader in radar detection systems (RDSs). The companyis looking at setting up a manufacturing plant overseas to producea new line of RDSs. This will be a five-year project. The companybought some land three years ago for $5 million in anticipation ofusing it as a toxic dump site for waste chemicals, but it built apiping system to safely discard the chemicals instead. The land wasappraised last week for $5.8 million. In five years, the aftertaxvalue of the land will be $6.2 million, but the company expects tokeep the land for a future project. The company wants to build itsnew manufacturing plant on this land; the plant and equipment willcost $32.4 million to build. The following market data on DEI’ssecurities is current: Debt: 235,000 7 percent coupon bondsoutstanding, 25 years to maturity, selling for 107 percent of par;the bonds have a $1,000 par value each and make semiannualpayments. Common stock: 9,300,000 shares outstanding, selling for$71.50 per share; the beta is 1.3. Preferred stock: 455,000 sharesof 4 percent preferred stock outstanding, selling for $81.50 pershare and and having a par value of $100. Market: 6 percentexpected market risk premium; 4 percent risk-free rate. DEI usesG.M. Wharton as its lead underwriter. Wharton charges DEI spreadsof 7 percent on new common stock issues, 5 percent on new preferredstock issues, and 3 percent on new debt issues. Wharton hasincluded all direct and indirect issuance costs (along with itsprofit) in setting these spreads. Wharton has recommended to DEIthat it raise the funds needed to build the plant by issuing newshares of common stock. DEI’s tax rate is 40 percent. The projectrequires $1,425,000 in initial net working capital investment toget operational. Assume Wharton raises all equity for new projectsexternally.

a. Calculate the project’s initial Time 0 cash flow, taking intoaccount all side effects. Assume that the net working capital willnot require flotation costs. (A negative answer should be indicatedby a minus sign. Do not round intermediate calculations. Enter youranswer in dollars, not millions of dollars, e.g., 1,234,567.) Cashflow $

b. The new RDS project is somewhat riskier than a typicalproject for DEI, primarily because the plant is being locatedoverseas. Management has told you to use an adjustment factor of +1percent to account for this increased riskiness. Calculate theappropriate discount rate to use when evaluating DEI’s project. (Donot round intermediate calculations. Enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.) Discount rate 10.52 %(correct answer)

c. The manufacturing plant has an eight-year tax life, and DEIuses straight-line depreciation. At the end of the project (thatis, the end of Year 5), the plant and equipment can be scrapped for$5 million. What is the aftertax salvage value of this plant andequipment? (Do not round intermediate calculations. Enter youranswer in dollars, not millions of dollars, e.g., 1,234,567.)Aftertax salvage value $7,860,000 (correct answer)

d. The company will incur $7,300,000 in annual fixed costs. Theplan is to manufacture 19,500 RDSs per year and sell them at$11,050 per machine; the variable production costs are $9,650 perRDS. What is the annual operating cash flow (OCF) from thisproject? (Do not round intermediate calculations. Enter your answerin dollars, not millions of dollars, e.g., 1,234,567.) Operatingcash flow $

e. DEI’s comptroller is primarily interested in the impact ofDEI’s investments on the bottom line of reported accountingstatements. What will you tell her is the accounting break-evenquantity of RDSs sold for this project? (Do not round intermediatecalculations and round your answer to the nearest whole number,e.g., 32.) Break-even quantity 8107 units (correct answer)

f. Finally, DEI’s president wants you to throw all yourcalculations, assumptions, and everything else into the report forthe chief financial officer; all he wants to know is what the RDSproject’s internal rate of return (IRR) and net present value (NPV)are. Assume that the net working capital will not require flotationcosts. (Enter your NPV answer in dollars, not millions of dollars,e.g., 1,234,567. Enter your IRR answer as a percent. Do not roundintermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.) IRR % _________ NPV $ _________