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"Sanders Enterprises, Inc., has been considering the purchase of a new manufacturing facility for $164,500. The facility is to be fully depreciated on a straight-line basis over 7 years. It is expected to have no resale value after the 7 years. Operating revenues from the facility are expected to be $82,000, in nominal terms, at the end of the first year. The revenues are expected to increase at the inflation rate of 6 percent. Production costs at the end of the first year will be $12,000, in nominal terms, and they are expected to increase at 7 percent per year. The real discount rate is 9 percent. The corporate tax rate is 31 percent. Sanders has other ongoing profitable operations.," ,