2) Moody Blues Inc. is considering an upgrade to the firm's manufacturing facilities. The firm will be investing in robotics for the first time in its history. The fully installed cost is expected to be $2,500,000 and fall into the IRS 5 year depreciation life category. The firm uses the straight line depreciation method for tax purposes. At the end of year 4 the firm will need to pay the manufacturer (the seller) $30,000 for a software upgrade. This cash cost is expected to be fully tax deductible in year 4. The firm expects the robotics to increase the manufacturing capacity of the plant allowing it to produce and sell 20,000 more units each year. This is expected to produce an increase of $600,000 in cash based taxable income. The firm believes that the useful life of the robots will be approximately 6 years. At the end of year 6 the firm expects to be able to sell the used robots for 20% of the original installed cost reduced by a $50,000 disassembly and removal fee. The firm is in the 40% tax bracket and will use a hurdle rate of 12% to evaluate this particular capital budgeting project