Houston Inc. is considering a project which involves building a new refrigerated warehouse which will cost $7,000,000 at year = 0 and which is expected to have before tax operating cash flows of $500,000 at the end of each of the next 2The Net Working Capital required initially is $50,000, no additional NWC is required after year 0. The companys corporate tax rate is 25%. Depreciation of $350,000 is included in the before tax operating cash flow. In year 20 the asset can be sold before tax at $75,000.Part I: If Houston’s WACC is 8 percent, what is the projects NPV? IRR? PI?Payback?Determine the capital budget for Years 0 20 and perform the necessary capitalbudget analysis.Part II: The risk/sensitivity factor is WACC. Should WACC increase to 8.5percent, could this influence your decision on the project? What would happen to