11-B3 Taxes, Straight-Line Depreciation, and NPV The president of Genomics, Inc., a biotechnology company, is considering the purchase of some equipment used for research and development. The cost is S400.000, the economic life and the recov ery period are both five years, and there is no terminal disposal value. Annual pretax cash inflows from operations would increase by $140,000, giving a total five-year pretax savings of $700,000. The income tax rate is 40%, and the required after-tax rate ofreturn is 14%. 1. Compute the net present value, assuming straight-line depreciation of $80,000 yearly for tax pur- poses. Should Genomics acquire the equipment