Product being produced BLOUSES

Target Market Dallas / Ft Worth

Primary Sales Channel Retail Outlets / Malls

Online Presence yes

Price of the product (year 1) $18.21

Annual growth rate on price 3.4%

Number of items sold (year 1)450000

Annual growth rate on units sold 2.75%

Variable cost per unit $5.75

Variable cost increase each year 4.25%

Fixed Costs $3,400,000

Fixed costs increasing each year 3.25%

Depreciation Method (all CAPEX) straight line

Depreciation period (all CAPEX)5 years

Tax rate 21%

Initital Working Capital $520,000

Add'tnl Working Capital One time (year 4) $150,000

Initial Investmnet for Equipment (year 0) $8,800,000

Suplemental Capital Required (year 3) $1,500,000

Market Vale of All Equipment Year 10 $2,000,000

Risk Free Rate (rfr)3.50%

Beta (b)1.12

S&P 500 Avg Return (MR)12%

Cost on Debt 6%

Tax Shield Eligible Yes

% of Equity in Cap Structure 75%

% of Debt in Cap Structure 25%

1)Build a 10-year discounted cash flow model based on the provided data to analyze the opportunity.

2)Using the provided data calculate the WACC and use this as your discount rate.