1) An R&D firm is considering purchasing equipment at a total cost of $60K. The debt ratio for this investment would be 0.40, and the loan would have an interest rate of 9% compounded annually, to be paid back in equal annual payments over 4 years. This equipment has a service life of 4 years, an expected salvage value of $17K at the end of those 4 years, and is depreciated using the MACRS 5-year recovery period class. If the firm purchases this special tool, they will increase their annual sales revenues by $55K, while incurring annual operating expenses of $18K. The annual cost of goods sold is estimated at $14K, and the project will require a $8K investment in working capital. The general inflation rate (f) over the next 4 years is expected to be 6% annually, and all cash flows except depreciation and interest expenses are assumed to be given in constant dollars. If the firm's inflation-free interest rate (i) is 12%, and the corporate tax rate is 21%, should the firm accept or reject this investment? Use the NPW method