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Analysts have developed the pro forma cash flows below for a potential acquisition, which would have an upfront cost of $45M. Year CF 1 $0.50M

Analysts have developed the pro forma cash flows below for a potential acquisition, which would have an upfront cost of $45M.

Year CF
1 $0.50M
2 $1.00M
3 $1.75M
4 $2.50M
5 $3.25M

In year 6 and beyond, analysts believe that the acquisitions cash flows will grow at a rate of 5% per year (in perpetuity). Assuming that the acquisition will be sold at the end of year 5 for its estimated terminal value, should the Analyst make the acquisition? Assume a required rate of return of 10%.

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