Corbin's Grocery Chain is small five-store regional chain that is contemplating investing in a store with a new format. The new store would focus on upscale products and better customer service. Sales are expected to be $14,750,000, gross margins should be about 28.00%, EBIT is expected to be $5,600,000 per year and the initial investment would require an outlay of $28,000,000. The firm's weighted cost of capital is 13.00%. The firm's tax rate is 40.00%. Assuming that there are no competing investment proposals, should the firm go ahead with this investment (given this information provided)?

Question 1 options:

	Yes, it should proceed with this investment because the gross profit margin exceeds the weighted cost of capital.
	Yes it should proceed with this project because the BEP exceeds the weighted cost of capital.
	Yes it should proceed with this project because the return on invested capital exceeds the weighed cost of capital.
	Yes it should proceed with this project because the after tax operating margin exceeds the weighted cost of capital.
	No, it should not proceed with the project.