Sanders Enterprises Inc, has been considering the purchase of a new manufacturing facility for 150,000. The facility is to be fully depreciated on a straight - line basis over seven years. Operating revenues from the facility are expected to be $70,000 in nominal terms at the end of the first year. The revenues are expected to increase at the inflation rate of 5%. Production cost at the end of the first year will be 20,000 in nominal terms and they are expected to increase by 6% per year. The real discount rate is 8 percent. The corporation tax rate is 34%. Sanders have other on going profitable operation. Should the company accept?