16. Urania corp. operates in the mining industry. The company is considering the purchase of a 1,000,000 extraction machine, which includes the installation costs. This purchase is considered an investment by fiscal authorities, which allows the software to be depreciated over 5 years using the straight-line depreciation method. The company estimates that the increased productivity due to the use of this machine will allow the firm to terminate five workers whose annual salaries are 280,000 (for the five workers). A year ago, the company has ordered a technical report concerning the integration of this machine in Urania corp. production process. The cost of this technical report was 15,000. Moreover, the company estimates that it will spend 40,000 on year 1 to provide training to its employees on the machine. The accounting department decides to allocate half of this amount (20,000) to another project of the company. Both costs (the technical report and the training) are considered expenses and are fully deductible. Urania Corp. needs to add working capital 200,000 on the year of the purchase. The net working capital will be recovered in full at the end of the period. The corporate tax rate is 34 percent and the company's cost of capital is 12%. Explain whether the following items are incremental (3 lines maximum). The technical report; b. The additional training cost. Should the company buy the software? A a. B