Hot Tub Co. is planning to build a new customer showroom. This project will require an investment of $12 million and it is expected that it will earn a return of 9%. The company requires financing to fund this project and is planning to obtain it from the following sources: The treasurer of Hot Tub Co. has already calculated and finalized the following cost information, but needs you to complete all necessary work to determine if this investment in the new showroom should be made. Cost data already properly determined: - The cost of preferred share financing is 10% - The cost of retained earnings financing is 15% Additional information provided: - The stated rate of interest regarding the long-term borrowings is 7%. - The common shares will be issued at a market price of $22 per share and it is anticipated that they will yield an annual dividend of $3 per share. The company will also incur issuance costs (ie. flotation costs) of $0.50 per share. - The income tax rate for the company is 38% Hot Tub Co. has an annual growth rate of 3%