Acommercial property is listed with rockwell realty at $ 70,000. rockwell realty negotiates with woods who is familiar with the property and who agrees to buy the property at that price. rockwell realty prepares an agreement of sale which is signed by woods, the buyer. copies are then mailed to downes, the owner for signature on may 31, 2007. the copies are received by downes on june 3, 2007. he signs and mails the signed copies to woods the same day. the copies are received by woods on june 5, 2007. on june 4, 2007, downes wired woods, "offer withdrawn, property not for sale". under these circumstances:

Burke enterprises is considering a machine costing $30 billion that will result in initial after-tax cash savings of $3.7 billion at the end of the first year, and these savings will grow at a rate of 2 percent per year for 11 years. after 11 years, the company can sell the parts for $5 billion. burke has a target debt/equity ratio of 1.2, a beta of 1.79. you estimate that the return on the market is 7.5% and t-bills are currently yielding 2.5%. burke has two issuances of bonds outstanding. the first has 200,000 bonds trading at 98% of par, with coupons of 5%, face of $1000, and maturity of 5 years. the second has 500,000 bonds trading at par, with coupons of 7.5%, face of $1000, and maturity of 12 years. kate, the ceo, usually applies an adjustment factor to the discount rate of +2 for such highly innovative projects. should the company take on the project?