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TGIF Sportswear is considering expanding its T-shift line. The project would last 3 years and has an initial investmment of $200,000. The after tax cash
TGIF Sportswear is considering expanding its T-shift line. The project would last 3 years and has an initial investmment of $200,000. The after tax cash flows are estimated at $60,000 for 1 year and $120,000 for each of years 2 & 3. The firm has a target debt-to-equity ratio of 40 percent. Its cost of equity is 14% and its cost of debt is 7%. The tax rate is 34%. Should TGIF Sportswear expand its T-shirt line?
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