Sovrano Caf is considering a major expansion of its business. The details of the proposed expansion project are summarized below:

• The company will have to purchase $950,000 equipment, that require installation cost and transportation cost equal $100,000.
• The cash inflow for the following 5 years are as following:

Year 1: $ 350,000

Year 2: $ 450,000

Year 3: $ 550,000

Year 4: $ 450,000

Year 5: $ 550,000

• The companys tax rate is 40%
• The Company finances its operations with 40% debt and 60% equity. The cost of debt is 16%, the banks certificates of deposit pay interest equal 14%, while the market risk premium is 20%.

What do you recommend?