OASIS in The Dessert is a new dessert-only restaurant in Jonesboro, AR. It serves wine, cheesecake, and brownies. In the most recent year, the company had $462,984 in revenue. The operating expenses for the company were 62% of revenue, and depreciation expense was another $20,000 per year. OASIS is looking at adding crepes to their menu and serve them for breakfast as well. The managers believe that the crepes will add $52,000 to revenue each year. The operating expenses will remain at 62% of revenue. The only new equipment needed is a $75,000 crepe maker, which will be depreciated over 5 years using the straight-line method (assume no salvage value). The managers believe that this restaurant will continue into the foreseeable future.

The company has a bank loan in the amount of $300,000 in which they make semi-annual interest only payments until the loan matures in 7 years. The coupon rate of interest on the loan is 8.5%. If the company were to get a new loan today, they would pay an interest rate of 9.25%. Oasis is not a publicly-traded company, so there is no market for their common stock. The three owners own a total of 275,000 shares of common stock at an estimated value today of $1.45 per share. Based on historical information, the beta for the company has been estimated to be 2.35. The S&P 500 is expected to return 14% next year, the 90 Day T-Bill Rate is 2.5%, and the companys tax rate is 30%.

Should the company enter into the Crepe market? Why or why not?

Can you please answer this question Correctly?/ with showing all the steps and explanation.