Dr. Chris Piker is evaluating the merits of a potential investment in a drone manufacturing company. He already owns the land for the facility, but he would need to purchase and install the assembly machinery for $230,000. The machine falls into the MACRS 5-year class (refer to the table in Chapter 11 Appendix), and it will cost $15,000 to modify it for Dr. Piker’s particular needs. A consultant, who charged Dr. Piker $10,000 for his services, already completed the process of restructuring the facility for the required zoning and industry standards. The facility requires additional net working capital of $5,000. Drone sales are expected to yield before-tax revenues of $450,000 per year with labor costs of $200,000 per year and fixed costs of $180,000 per year. Dr. Piker expects the machine to be used for 5 years and then sold for $60,000.Dr. Piker has asked you to evaluate his proposed project, and he has provided you with the following information about the investment:Dr. Piker has a target capital structure of 30% debt, 10% preferred stock, and 60% common equity. He plans to issue bonds with a 6.5% coupon, paid semiannually, a maturity of 10 years, and sell them for $1,000. He also believes that he could sell, at par, $50 preferred stock that pays an 8.5% annual dividend, but flotation costs of 6% would be incurred. He estimates the beta of this project to be 1.5, the risk-free rate is 4%, and the expected return on the market portfolio is 12%. Dr. Piker plans to issue shares of common stock for $35 apiece, with an initial dividend of $3.15 that is expected to show constant growth of 5%. He uses a risk premium of 5.5% when using the bond-yield-plus-risk-premium method to find the cost of equity. His estimated marginal tax rate is 38%.In addition to finding the firm’s average-risk cost of capital, Dr. Piker has also asked you to calculate a risk-adjusted cost of capital. He believes that the project’s cash flows for years 1 through 5 will increase by 10% in a particularly good market, and the cash flows will decrease by 10% in a particularly bad market. He estimates that there is a 15% probability of a good market occurring, a 25% probability of a bad market occurring, and a 60% probability of an “average” market occurring.To complete this task of calculating a risk-adjusted cost of capital, you will need to find the expected NPV, its standard deviation, and its coefficient of variation (CV). Dr. Piker informs you that his average project has a CV in the range of 1.0 to 2.0. If the CV of a project being evaluated is greater than 2.0, 2 percentage points are added to the cost of capital for the evaluation. Similarly, if the CV is less than 1.0, 1 percentage point is deducted from the cost of capital for the evaluation.In the end, Dr. Chris Piker wants to know whether to accept or reject the project. He expects you to make your conclusion using 3 techniques: discounted payback method, NPV analysis, and IRR analysis.---------Calculate the Cost of Debt (Kd).Calculate the After-tax Cost of Debt (Kdt).Calculate the Cost of Preferred Stock (Kps).Calculate the Cost of Equity (Ke) using the Bond-Yield-plus-Risk-Premium approach.Calculate the Cost of Equity (Ke) using the CAPM approach.Calculate the Cost of Equity (Ke) using the Dividend Discount Model (DDM).Calculate the Average Cost of Equity (Ke) by taking the average of your prior three answers.Using your answers for the component costs, calculate the company's Weighted Average Cost of Capital (WACC).Calculate the Initial Outlay (CF0) for the project.Calculate the Terminal Cash Flows for the project.Calculate CF1 of the Annual Operating Cash Flows for the project.Calculate CF2 of the Annual Operating Cash Flows for the project.Calculate CF3 of the Annual Operating Cash Flows for the project.Calculate CF4 of the Annual Operating Cash Flows for the project.Calculate CF5 of the Annual Operating Cash Flows for the project (do not include any Terminal Cash Flows in your answer).Riskiness of Cash Flows - Scenario AnalysisCalculate the NPV for the "Average" scenario (i.e., use your calculated CFs).Calculate the NPV for the "Good Market" scenario.Calculate the NPV for the "Bad Market" scenario.Calculate the Expected NPV across all scenarios.Calculate the Coefficient of Variation (CV) across the scenarios.Based on your CV calculation, what is the Risk-Adjusted WACC? Use your Capital Budgeting Techniques (Discounted Payback, NPV, and IRR) to evaluate the project.Using your Risk-Adjusted WACC, calculate the Discounted Payback period for the project.Using your Risk-Adjusted WACC, calculate the NPV for the project.Using your Risk-Adjusted WACC, calculate the Internal Rate of Return (IRR) for the project.Based on your calculations, what is your recommendation for Dr. Piker?Select one:a. He should accept the project.b. He should reject the project.----Please upload an Excel file that clearly shows all work and calculations and any values entered into an Excel function.