Nike, which currently views itself as operating in the sporting wear (shoes and clothes) segment, is considering an expansion into the fashion apparel business, producing high-priced casual clothing for teenagers and young adults. You have been asked to collect the data to make the assessment and have come back with the following information: 1. You estimate that it will cost Nike $ 2.5 billion to establish a presence in this business. Of this amount, $ 1 billion will have to be spent right now acquiring land, equipment and other assets needed for the business. There will be an additional $ 1 billion investment a year from now, and final investment of $ 0.5 billion at the end of 2 years. The business will be operational at the start of the third year. 2. Of the initial investment of $ 2.5 billion, $1.5 billion is fully depreciable over 10 years starting in the third year, and will be depreciated using double-declining balance depreciation (switching to straight line when it provides a higher depreciation)