Liberty Bell is a successful holding company with investments in several fields. A new investment in video equipment with an initial outlay of $450,000 involves a risk factor determined to be 25% higher than its present portfolio of investments without presenting any diversification benefits. Revenue is projected to be $150,000 per year for 5 years at which time another capital outlay on equipment of $90,000 will be required. Expenses over this initial 5 year period will be $35,000 per year. Beginning in the sixth year revenues will increase by $50,000 a year, expenses increase by $10,000 and continue until year 10 when the business will be sold. The equipment will be sold for $60,000 (no recapture, capital gains, or terminal loss will be triggered). With a corporate tax rate of 47%, an overall cost of capital of 16% and a C.C.A rate on video equipment of 30%

should liberty bell proceed?