Please show all your work $-$ formulas, inputs and results. You may use a calculator or Excel to come up with results, but showing the formulas and inputs is important!

Your company operates in the chemical industry and is now considering the addition of a new line of detergents. The project costs $$1$ million and is estimated to generate free cash flows of $$250,000$ per year for $7$ years.

The company has been financing its activities with $30\%$ debt, $10\%$ preferred stock and $60\%$ common stock. Its debt is comprised of an existing loan with a $10\%$ interest rate. The cost of preferred stock is $12\%,$ and the cost of common stock is $14\%.$ The company is subject to a $40\%$ tax rate.

Should the company invest in the new line of detergents?