A large manufacturing firm is considering purchasing a new machine for a purchase price of $186,000. It will incur shipping and installation cost of $30,000 and $21,000 respectively. The new machine is expected to last three years and can be sold for $3,240 scrap. Before installation, management needs to ensure that it will comply to environmental laws and contacted a consultant whose cost was $15,000. The machine should increase productivity and annual operating cost should decrease by $125,000. The capitalized cost of the machine is to be financed by 80% debt. Before this project, the entity was all equity financed with a growth rate in stock price being 10%. The company's EPS is currently $18 per share and dividend is expected to be paid at $12 per share. The current price of the stock is $120 per share. The company's debt is to be borrowed at 25%. The entity has a marginal tax rate of 40% and projects are discounted at its WACC. All cash inflows are deemed to occur at the end of each period and depreciation is an allowable deduction for income taxes purposes. Required: a) Compute the company's WACC (weighted average cost of capital). (3 marks) b) Compute the Net Present Value (NPV) and payback period. (20 marks) c) Based on the NPV and payback period, advise management on the feasibility of the project. (2 marks)