Project Analysis and Inflation Mustaine Enterprises, Inc., has been considering the purchase of a new manufacturing facility for $272,000. The facility is to be fully depreciated on a straight-line basis over seven years. It is expected to have no resale value after the seven years. Operating revenues from the facility are expected to be $107,000, in nominal terms, at the end of the first year. The revenues are expected to increase at the inflation rate of 5 percent. Production costs at the end of the first year will be $32,000, in nominal terms, and they are expected to increase at 6 percent per year. The real discount rate is 8 percent. The corporate tax rate is 34 percent. Mustaine has other ongoing profitable operations. Should the company accept the project?

		Year 0	Year 1	Year 2	Year3	Year4	Year5	Year6	Year7
Revenues			$107,000	$112,350	$117,967.5	$123,865.9	$130,059.2	$136,562.1	$143,390.2
Costs			32,000	33,920	35,955.2	38,112.51	40,399.26	42,823.22	45,392.61
Depreciation
EBT
Taxes @34%
Net Income
OFC
Capital Spending		($272,000)
Cash Flow		($272,000)

Solve for NPV