Branston Soda Company manufactures soda. In 2 0 x 0 , Branston earned $ 1 2 . 0 million in operating income and had total capital of $ 7 4 million. Branston's total capital is 6 5 percent equity and 3 5 percent 1 0 - year bonds paying 4 percent interest. Branston's marginal tax rate is 2 5 percent. The company's CFO believes 1 6 percent is an appropriate required equity rate of return. The soft drink industry is very mature, with a few key competitors. Annual soda sales growth is minimal typically coinciding with inflation - and market share increases are difficult to obtain. The CEO believes that the company's future financial performance will be similar _ to the prior year's results due to the nature of the industry. As a result, the CEO is interested in pursuing growth opportunities through a new product launch