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\mathrm{.}21$

Annual growth rate on price $3\mathrm{.}4\%$

Number of items sold $($year $1)450000$

Annual growth rate on units sold $2\mathrm{.}75\%$

Variable cost per unit $$5\mathrm{.}75$

Variable cost increase each year $4\mathrm{.}25\%$

Fixed Costs $$3,400,000$

Fixed costs increasing each year $3\mathrm{.}25\%$

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$)3\mathrm{.}50\%$

Beta $($b$)1\mathrm{.}12$

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.