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Inputs 1 2 3 Revenues 100,000 Revenue Inflation Rate 7.00% 7.00% Expenses 50,000 Expense Inflation Rate 5.00% 5.00% Operating Cash Flows, Old Asset 25,000 25,000

Inputs	1	2	3
Revenues	100,000
Revenue Inflation Rate		7.00%	7.00%
Expenses	50,000
Expense Inflation Rate		5.00%	5.00%
Operating Cash Flows, Old Asset	25,000	25,000	25,000

If the firm's cost of capital is 15%, should the firm invest in this asset? Justify your answer.

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