Question: Quiet Quilts is considering adding another division that requires a cash outlay of $29,500, and is expected to generate $6,250 in after-tax cash flows each

Quiet Quilts is considering adding another division that requires a cash outlay of $29,500, and is expected to generate $6,250 in after-tax cash flows each year for seven years. The CFO has determined the new division’s beta coefficient is 0.8. The market return is expected to be 11 percent and the risk-free rate of return is 4 percent. Should Quiet add the new division?

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